VISHAY INTERTECHNOLOGY INC 10-K

Item 9A. CONTROLS AND PROCEDURES Conclusion Regarding the Effectiveness of Disclosure Controls and Procedures An evaluation was performed under the supervision and with the participation of our management, including the Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), of the effectiveness of the design and operation of our disclosure controls and procedures, 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 of the end of the period covered by this annual report to ensure that information required to be disclosed in reports that we file or submit under the Exchange Act is: (1) recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms; and (2) accumulated and communicated to our management, including our CEO and CFO, as appropriate to allow timely decisions regarding required disclosure. Changes in Internal Control Over Financial Reporting There were no changes in our internal control over financial reporting during our last fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. Certifications The certifications of our CEO and CFO pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 are filed as Exhibits 31.1 and 31.2 to this Annual Report on Form 10-K. We have also filed with the New York Stock Exchange the most recent Annual Certification as required by Section 303A.12(a) of the New York Stock Exchange Listed Company Manual. Management’s Report on Internal Control Over Financial Reporting Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined 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 of December 31, 2023 based on the 2013 framework set forth in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on that evaluation, our management concluded that our internal control over financial reporting was effective as of December 31, 2023. Ernst & Young LLP has issued an attestation report on the effectiveness of our internal control over financial reporting. Their report is set forth below. 60 Report of Independent Registered Public Accounting Firm To the Stockholders and the Board of Directors of Vishay Intertechnology, Inc. Opinion on Internal Control over Financial Reporting We have audited Vishay Intertechnology, Inc.’s internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). In our opinion, Vishay Intertechnology, Inc. (the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2023, based on the COSO criteria. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2023 and 2022, and the related consolidated statements of operations, comprehensive income, stockholders’ equity, and cash flows for each of the three years in the period ended December 31, 2023, and the related notes and our report dated February 16, 2024 expressed an unqualified opinion thereon. Basis for Opinion The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Definition and Limitations of Internal Control Over Financial Reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of the financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect material misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. /s/ Ernst & Young LLP Philadelphia, Pennsylvania February 16, 2024 61 Item 9B. OTHER INFORMATION None of our directors or executive officers adopted or terminated a Rule 10b5-1 trading arrangement or adopted or terminated a non-Rule 10b5-1 trading arrangement (as defined in Item 408(c) of Regulation S-K) during the fiscal quarter ended December 31, 2023. Item 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS None. PART III Item 10. DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE We have a code of ethics applicable to our Chief Executive Officer, Chief Financial Officer, Principal Accounting Officer or Controller, and financial managers. The text of this code has been posted on our website. To view the code, go to our website at ir.vishay.com and click on Corporate Governance. You can obtain a printed copy of this code, free of charge, by contacting us at the following address: Corporate Investor Relations Vishay Intertechnology, Inc. 63 Lancaster Avenue Malvern, PA 19355-2143 It 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 of December 31, 2023, our most recent fiscal year end, and is incorporated herein by reference. Item 11. EXECUTIVE COMPENSATION Information required under this Item will be contained in our definitive proxy statement, which will be filed within 120 days of December 31, 2023, our most recent fiscal year end, and is incorporated herein by reference. Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS Information required under this Item will be contained in our definitive proxy statement, which will be filed within 120 days of December 31, 2023, our most recent fiscal year end, and is incorporated herein by reference. Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE Information required under this Item will be contained in our definitive proxy statement, which will be filed within 120 days of December 31, 2023, our most recent fiscal year end, and is incorporated herein by reference. Item 14. PRINCIPAL ACCOUNTING FEES AND SERVICES Information required under this Item will be contained in our definitive proxy statement, which will be filed within 120 days of December 31, 2023, our most recent fiscal year end, and is incorporated herein by reference. 62 P ART IV Item 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES (a) Documents Filed as Part of Form 10-K 1. Financial Statements The Consolidated Financial Statements for the year ended December 31, 2023 are filed herewith. See Index to the Consolidated Financial Statements on page F-1 of this report. 2. Financial Statement Schedules All financial statement schedules have been omitted because they are not applicable, not material, or the required information is shown in the consolidated financial statements or the notes thereto. 3. Exhibits 3.1 Corrected Amended and Restated Certificate of Incorporation of Vishay Intertechnology, Inc. dated June 5, 2012. Incorporated by reference to Exhibit 3.1 to our current report on Form 8-K filed June 5, 2012. 3.2 Amended and Restated Bylaws dated June 1, 2011. Incorporated by reference to Exhibit 3.2 to our current report on Form 8-K filed June 2, 2011. 3.3 First Amendment to Amended and Restated Bylaws. Incorporated by reference to Exhibit 3.1 to our Current Report on Form 8-K, filed on August 11, 2015. 3.4 Second Amendment to Amended and Restated Bylaws. Incorporated by reference to Exhibit 3.1 to our Current Report on Form 8-K, filed on February 21, 2023. 4.1 Indenture, dated as of June 12, 2018, by and between Vishay Intertechnology, Inc. and HSBC Bank USA, N.A., as Trustee. Incorporated by reference to Exhibit 4.1 to our current report on Form 8-K filed June 13, 2018. 4.2 Form of Global Note, representing Vishay Intertechnology, Inc.'s 2.25% Senior Convertible Notes due 2025 (included as Exhibit A to the Indenture filed as Exhibit 4.5). Incorporated by reference to Exhibit 4.2 to our current report on Form 8-K, filed on June 13, 2018. 4.3 Description of Capital Stock. Incorporated by reference to Exhibit 4.1 to our quarterly report on Form 10-Q for the fiscal quarter ended October 1, 2022. 4.4 First Supplemental Indenture, dated as of December 23, 2020, by and between Vishay Intertechnology, Inc. and HSBC Bank USA, N.A., as Trustee. Incorporated by reference to Exhibit 4.1 to our current report on Form 8-K filed January 5, 2021. 4.5 Indenture, dated as of September 12, 2023, by and between Vishay Intertechnology, Inc. and HSBC Bank USA, National Association, as Trustee. Incorporated by reference to Exhibit 4.1 in our current report on Form 8-K filed September 12, 2023. 4.6 Form of Global Note, representing Vishay Intertechnology, Inc.'s 2.25% Senior Convertible Notes due 2030 (included as Exhibit A to the Indenture filed as Exhibit 4.1). Incorporated by reference to Exhibit 4.2 in our current report on Form 8-K filed September 12, 2023. 10.1† Amended and restated Vishay Intertechnology 162(m) Cash Bonus Plan. Incorporated by reference to Annex A to our Proxy Statement, dated March 31, 2017, for our 2017 Annual Meeting of Stockholders. 10.2† Amended and Restated Vishay Intertechnology, Inc. 2007 Stock Incentive Program. Incorporated by reference to Annex A to our definitive proxy statement, dated April 4, 2014, for our 2014 Annual Meeting of Stockholders. 10.3† Amended and Restated Vishay Intertechnology, Inc. 2007 Stock Incentive Program (Including Restated Annex A – Israel). Incorporated by reference to Exhibit 10.3 to our annual report on Form 10-K for the year ended December 31, 2022. 10.4† Vishay Intertechnology, Inc. 2023 Long-Term Incentive Plan. Incorporated by reference to Annex A to our definitive proxy statement, dated April 4, 2023, for our 2023 Annual Meeting of Stockholders. 10.5† Employment agreement, dated January 1, 2004, between Vishay Europe GmbH (an indirect wholly owned subsidiary of Vishay Intertechnology, Inc.) and Dr. Gerald Paul. Incorporated by reference to Exhibit 10.3 to our quarterly report on Form 10-Q for the fiscal quarter ended October 2, 2004. 10.6† Amendment to Employment Agreement, dated August 8, 2010, between Vishay Europe GmbH (an indirect wholly owned subsidiary of Vishay Intertechnology, Inc.) and Dr. Gerald Paul. Incorporated by reference to Exhibit 10.5 to our quarterly report on Form 10-Q for the fiscal quarter ended July 3, 2010. 10.7† Amendment to Employment Agreement, dated August 28, 2011, between Vishay Europe GmbH (an indirect wholly owned subsidiary of Vishay Intertechnology, Inc.) and Dr. Gerald Paul. Incorporated by reference to Exhibit 10.3 to our quarterly report on Form 10-Q for the fiscal quarter ended October 1, 2011. 10.8† Amendment to Employment Agreement, dated July 1, 2021, between Vishay Europe GmbH (an indirect wholly owned subsidiary of Vishay Intertechnology, Inc.), Vishay Electronic GmbH (an indirect wholly owned subsidiary of Vishay Intertechnology, Inc.), and Dr. Gerald Paul. Incorporated by reference to Exhibit 10.1 to our quarterly report on Form 10-Q for the fiscal quarter ended July 3, 2021. 10.9† Employment Agreement, dated January 1, 2004, between Vishay Israel Ltd. (a wholly owned subsidiary of Vishay Intertechnology, Inc.) and Marc Zandman. Incorporated by reference to Exhibit 10.2 to our quarterly report on Form 10-Q for the fiscal quarter ended October 2, 2004. 63 10.10† Amendment to Employment Agreement, dated August 8, 2010, between Vishay Israel Ltd. (a wholly owned subsidiary of Vishay Intertechnology, Inc.) and Marc Zandman. Incorporated by reference to Exhibit 10.6 to our quarterly report on Form 10-Q for the fiscal quarter ended July 3, 2010. 10.11† Amendment to Employment Agreement, dated August 30, 2011, between Vishay Israel Ltd. (a wholly owned subsidiary of Vishay Intertechnology, Inc.) and Marc Zandman. Incorporated by reference to Exhibit 10.2 to our quarterly report on Form 10-Q for the fiscal quarter ended October 1, 2011. 10.12† Amendment to Employment Agreement, dated February 23, 2021, between Vishay Israel Ltd. (a wholly owned subsidiary of Vishay Intertechnology, Inc.) and Marc Zandman. Incorporated by reference to Exhibit 10.1 to our quarterly report on Form 10-Q for the fiscal quarter ended April 3, 2021. 10.13 † Amendment to Employment Agreement, dated July 14, 2022, between Vishay Israel Ltd. (a wholly owned subsidiary of Vishay Intertechnology, Inc.) and Marc Zandman. Incorporated by reference to Exhibit 10.1 to our current report on Form 8-K, filed July 18, 2022. 10.14† Employment Agreement, dated February 15, 2018, between Vishay Americas, Inc. (a wholly owned subsidiary of Vishay Intertechnology, Inc.), Vishay Intertechnology, Inc., and Joel Smejkal. Incorporated by reference to Exhibit 10.5 to our current report on Form 8-K, filed on February 16, 2018. 10.15† Amendment to Employment Agreement between Vishay Dale Electronics, LLC (a wholly owned subsidiary of Vishay Intertechnology, Inc.), Vishay Intertechnology, Inc., and Joel Smejkal dated May 20, 2020. Incorporated by reference to Exhibit 10.1 to our quarterly report on Form 10-Q for the fiscal quarter ended July 4, 2020. 10.16† Second Amendment to Employment Agreement, dated February 23, 2021, between Vishay Dale Electronics, LLC (a wholly owned subsidiary of Vishay Intertechnology, Inc.), Vishay Intertechnology, Inc., and Joel Smejkal. Incorporated by reference to Exhibit 10.6 to our quarterly report on Form 10-Q for the fiscal quarter ended April 3, 2021. 10.17† Amended and Restated Employment Agreement, dated July 14, 2022, between Vishay Dale Electronics LLC (a wholly owned subsidiary of Vishay Intertechnology, Inc.), Vishay Intertechnology, Inc., and Joel Smejkal. Incorporated by reference to Exhibit 10.2 to our current report on Form 8-K, filed July 18, 2022. 10.18† Employment Agreement, dated February 15, 2018, between Vishay Europe GmbH (an indirect wholly owned subsidiary of Vishay Intertechnology, Inc.), Vishay Intertechnology, Inc., and Lori Lipcaman. Incorporated by reference to Exhibit 10.1 to our current report on Form 8-K, filed on February 16, 2018. 10.19† First Amendment to Employment Agreement, dated February 28, 2020, between Vishay Europe GmbH (an indirect wholly owned subsidiary of Vishay Intertechnology, Inc.), Vishay Intertechnology, Inc., and Lori Lipcaman. Incorporated by reference to Exhibit 10.1 to our current report on Form 8-K, filed February 28, 2020. 10.20† Second Amendment to Employment Agreement, dated February 23, 2021, between Vishay Europe GmbH (an indirect wholly owned subsidiary of Vishay Intertechnology, Inc.), 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 ended April 3, 2021. 10.21† Third Amendment to Employment Agreement, dated July 14, 2022, between Vishay Europe GmbH (an indirect wholly owned subsidiary of Vishay Intertechnology, Inc.), Vishay Intertechnology, Inc., and Lori Lipcaman. Incorporated by reference to Exhibit 10.3 to our current report on Form 8-K, filed July 18, 2022. 10.22† Terms and Conditions of Johan Vandoorn Employment Agreement, dated January 16, 2012. Incorporated by reference to Exhibit 10.31 to our 2011 annual report on Form 10-K. 10.23† 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 ended March 29, 2014. 10.24† Second Amendment to Terms and Conditions of Johan Vandoorn Employment Agreement, dated March 3, 2015. Incorporated by reference to Exhibit 10.4 to our quarterly report on Form 10-Q for the fiscal quarter ended April 4, 2015. 10.25† Third Amendment to Terms and Conditions of Johan Vandoorn Employment Agreement, dated February 15, 2018. Incorporated by reference to Exhibit 10.2 to our current report on Form 8-K, filed on February 16, 2018. 10.26† Fourth Amendment to the Terms and Conditions of Johan Vandoorn Employment Agreement, dated February 23, 2021. Incorporated by reference to Exhibit 10.3 to our quarterly report on Form 10-Q for the fiscal quarter ended April 3, 2021. 10.27 † Transition Agreement, dated July 15, 2022, between Vishay Capacitors Belgium NV (an indirect wholly owned subsidiary of Vishay Intertechnology, Inc.) and Johan Vandoorn. Incorporated by reference to Exhibit 10.8 to our quarterly report on Form 10-Q for the fiscal quarter ended October 1, 2022. 10.28† Employment Agreement, dated February 15, 2018, between Vishay Americas, Inc. (a wholly owned subsidiary of Vishay Intertechnology, Inc.), Vishay Intertechnology, Inc., and David Valletta. Incorporated by reference to Exhibit 10.3 to our current report on Form 8-K, filed on February 16, 2018. 10.29† First Amendment to Employment Agreement, dated February 23, 2021, between Vishay Americas, Inc. (a wholly owned subsidiary of Vishay Intertechnology, Inc.) Vishay Intertechnology, Inc., and David Valletta. Incorporated by reference to Exhibit 10.4 to our quarterly report on Form 10-Q for the fiscal quarter ended April 3, 2021. 10.30 † Transition Agreement, dated July 15, 2022, between Vishay Americas, Inc. (a wholly owned subsidiary of Vishay Intertechnology, Inc.), Vishay Intertechnology, Inc., and David Valletta. Incorporated by reference to Exhibit 10.9 to our quarterly report on Form 10-Q for the fiscal quarter ended October 1, 2022. 10.31† Employment Agreement, dated February 15, 2018, between Vishay Singapore Pte. Ltd. (an indirect wholly owned subsidiary of Vishay Intertechnology, Inc.), Vishay Intertechnology, Inc., and Clarence Tse. Incorporated by reference to Exhibit 10.4 to our current report on Form 8-K, filed on February 16, 2018. 10.32† First Amendment to Employment Agreement, dated February 23, 2021, between Vishay Singapore Pte. Ltd. (an indirect wholly owned subsidiary of Vishay Intertechnology, Inc.), Vishay Intertechnology, Inc., and Clarence Tse. Incorporated by reference to Exhibit 10.5 to our quarterly report on Form 10-Q for the fiscal quarter ended April 3, 2021 . 64 10.33† Transition Agreement, dated July 15, 2022, between Vishay Singapore Pte. Ltd. (an indirect wholly owned subsidiary of Vishay Intertechnology, Inc.), Vishay Intertechnology, Inc., and Clarence Tse. Incorporated by reference to Exhibit 10.10 to our quarterly report on Form 10-Q for the fiscal quarter ended October 1, 2022. 10.34† Employment Agreement between Vishay Israel Ltd. (a wholly owned subsidiary of Vishay Intertechnology, Inc.), Vishay Intertechnology, Inc., and Jeffrey Webster dated May 20, 2020. Incorporated by reference to Exhibit 10.2 to our quarterly report on Form 10-Q for the fiscal quarter ended July 4, 2020. 10.35† First Amendment to Employment Agreement, dated February 23, 2021, between Vishay Israel Ltd. (a wholly owned subsidiary of Vishay Intertechnology, Inc.), Vishay Intertechnology, Inc., and Jeffrey Webster. Incorporated by reference to Exhibit 10.7 to our quarterly report on Form 10-Q for the fiscal quarter ended April 3, 2021. 10.36† Amended and Restated Employment Agreement, dated July 14, 2022, between Vishay Israel Ltd. (a wholly owned subsidiary of Vishay Intertechnology, Inc.), Vishay Intertechnology, Inc., and Jeff Webster. Incorporated by reference to Exhibit 10.4 to our current report on Form 8-K, filed July 18, 2022. 10.37† Employment Agreement, dated July 14, 2022, between Siliconix incorporated (a wholly owned subsidiary of Vishay Intertechnology, Inc.), Vishay Intertechnology, Inc. and Roy Shoshani. Incorporated by reference to Exhibit 10.5 to our current report on Form 8-K, filed July 18, 2022. 10.38† Employment Agreement between Vishay Electronic GmbH (an indirect wholly owned subsidiary of Vishay Intertechnology, Inc.), Vishay Intertechnology, Inc., and Andreas Randebrock dated May 20, 2020. Incorporated by reference to Exhibit 10.3 to our quarterly report on Form 10-Q for the fiscal quarter ended July 4, 2020. 10.39† First Amendment to Employment Agreement, dated February 23, 2021, between Vishay Electronic GmbH (an indirect wholly owned subsidiary of Vishay Intertechnology, Inc.), Vishay Intertechnology, Inc., and Andreas Randebrock. Incorporated by reference to Exhibit 10.8 to our quarterly report on Form 10-Q for the fiscal quarter ended April 3, 2021. 10.40† Second Amendment to Employment Agreement, dated July 14, 2022, between Vishay Electronic GmbH (an indirect wholly owned subsidiary of Vishay Intertechnology, Inc.), Vishay Intertechnology, Inc., and Andreas Randebrock. Incorporated by reference to Exhibit 10.6 to our current report on Form 8-K, filed July 18, 2022. 10.41† Second Amended and Restated Employment Agreement, dated July 14, 2022, between Vishay Intertechnology, Inc. and Peter Henrici. Incorporated by reference to Exhibit 10.7 to our current report on Form 8-K, filed July 18, 2022. 10.42† 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-K filed December 23, 2016. 10.43 Master Separation and Distribution Agreement, dated June 22, 2010, by and among Vishay Intertechnology, Inc. and Vishay Precision Group, Inc. Incorporated by reference to Exhibit 10.1 to our current report on Form 8-K filed June 23, 2010. 10.44 Employee Matters Agreement, dated June 22, 2010, by and among Vishay Intertechnology, Inc. and Vishay Precision Group, Inc. Incorporated by reference to Exhibit 10.2 to our current report on Form 8-K filed June 23, 2010. 10.45 Tax Matters Agreement, dated July 6, 2010, between Vishay Precision Group, Inc. and Vishay Intertechnology, Inc. Incorporated by reference to Exhibit 10.1 to Vishay Precision Group, Inc.’s current report on Form 8-K filed July 7, 2010. 10.46 Trademark License Agreement, dated July 6, 2010, between Vishay Precision Group, Inc. and Vishay Intertechnology, Inc. Incorporated by reference to Exhibit 10.2 to Vishay Precision Group, Inc.’s current report on Form 8-K filed July 7, 2010. 10.47* Supply Agreement, dated July 6, 2010, between Vishay Advanced Technology, Ltd. And Vishay Dale Electronics, Inc. Incorporated by reference to Exhibit 10.4 to Vishay Precision Group, Inc.’s current report on Form 8-K filed July 7, 2010. 10.48* Patent License Agreement, dated July 6, 2010, between Vishay Precision Group, Inc. and Vishay Dale Electronics, Inc. Incorporated by reference to Exhibit 10.6 to Vishay Precision Group, Inc.’s current report on Form 8-K filed July 7, 2010. 10.49* Supply Agreement, dated July 6, 2010, between Vishay Dale Electronics, Inc. and Vishay Advanced Technology, Ltd. Incorporated by reference to Exhibit 10.8 to Vishay Precision Group, Inc.’s current report on Form 8-K filed July 7, 2010. 10.50* 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-K filed July 7, 2010. 10.51* 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-K filed July 7, 2010. 10.52 Intellectual Property License Agreement, dated July 6, 2010, between Vishay S.A. and Vishay Precision Foil GmbH. Incorporated by reference to Exhibit 10.11 to Vishay Precision Group, Inc.’s current report on Form 8-K filed July 7, 2010. 10.53* 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-K filed July 7, 2010. 10.54* Intellectual Property License Agreement, dated July 6, 2010, between Vishay S.A. and Vishay Measurements Group, Inc. Incorporated by reference to Exhibit 10.13 to Vishay Precision Group, Inc.’s current report on Form 8-K filed July 7, 2010. 10.55 Credit Agreement, dated as of June 5, 2019, among Vishay Intertechnology, Inc. and JPMorgan Chase Bank, N.A., as administrative agent and the lenders and other parties thereto. Incorporated by reference to Exhibit 10.1 to our current report on Form 8-K filed June 5, 2019. 10.56 Amendment No. 1 to Credit Agreement, dated as of September 20, 2019, among Vishay Intertechnology, Inc. and JPMorgan Chase Bank, N.A., as administrative agent and the lenders and other parties thereto. Incorporated by reference to Exhibit 10.1 to our quarterly report on Form 10-Q for the fiscal quarter ended September 28, 2019. 10.57 Amendment and Restatement Agreement, dated as of May 8, 2023 among Vishay Intertechnology, Inc. and JPMorgan Chase Bank, N.A., as administrative agent, and the lenders and other parties thereto. Incorporated by reference to Exhibit 10.1 to our current report on Form 8-K, filed May 8, 2023. 65 10.58† Vishay Intertechnology, Inc. Form of Executive Officer Restricted Stock Unit Agreement. Incorporated by reference to Exhibit 10.1 in our quarterly report on Form 10-Q for the fiscal quarter ended April 1, 2023. 10.59† Vishay Intertechnology, Inc. Form of Non-Employee Director Restricted Stock Unit Agreement. Incorporated by reference to Exhibit 10.48 to our 2019 annual report on Form 10-K. 10.60† Vishay Intertechnology, Inc. Form of Executive Officer Phantom Stock Unit Agreement. Incorporated by reference to Exhibit 10.50 to our 2019 annual report on Form 10-K. 10.61† Vishay Intertechnology, Inc. Non-Employee Director Compensation Plan. Incorporated by reference to Exhibit 10.44 to our 2020 annual report on Form 10-K. 10.62† Form of Future Deferred Remuneration Arrangement of Vishay Israel Ltd. (a wholly owned subsidiary of Vishay Intertechnology, Inc.). Incorporated by reference to Exhibit 10.1 to our current report on Form 8-K filed December 28, 2021. 10.63 Form of Base Capped Call Confirmation. Incorporated by reference to Exhibit 10.1 in our current report on Form 8-K filed September 12, 2023. 10.64 Form of Additional Capped Call Confirmation. Incorporated by reference to Exhibit 10.2 in our current report on Form 8-K filed September 12, 2023. 10.66 † ** Form of Phantom Stock Award Agreement. 10.67 † ** Form of Non-Employee Director RSU Agreement. 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, as adopted 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, as adopted 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. 97.1** Vishay Intertechnology, Inc. Dodd-Frank Clawback Policy 101** Interactive Data File (Annual Report on Form 10-K, for the year ended December 31, 2023, furnished in iXBRL (Inline eXtensible Business Reporting Language)). 104** Cover Page Interactive Data File (formatted as Inline eXtensible Business Reporting Language and contained in Exhibit 101) __________________ * Confidential treatment has been requested by, and accorded to, VPG with respect to certain portions of this Exhibit. Omitted portions have been filed separately by VPG with the Securities and Exchange Commission. ** Filed herewith. † Denotes a management contract or compensatory plan, contract, or arrangement. Item 16. FORM 10-K SUMMARY Not applicable. 66 SIGNATURES Pursuant to the requirement of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. VISHAY INTERTECHNOLOGY, INC. By: /s/ Joel Smejkal Joel Smejkal President and Chief Executive Officer February 16, 2024 Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated below. Signature Title Date Principal Executive Officer: /s/ Joel Smejkal President, Chief Executive Officer, February 16, 2024 Joel Smejkal and Director Principal Financial and Accounting Officer: /s/ Lori Lipcaman Executive Vice President and Chief February 16, 2024 Lori Lipcaman Financial Officer Board of Directors: /s/ Marc Zandman Executive Chairman of February 16, 2024 Marc Zandman the Board of Directors /s/ Renee B. Booth Director February 16, 2024 Dr. Renee B. Booth /s/ Michael J. Cody Director February 16, 2024 Michael J. Cody /s/ Michiko Kurahashi Director February 16, 2024 Dr. Michiko Kurahashi /s/ Abraham Ludomirski Director February 16, 2024 Dr. Abraham Ludomirski /s/ John Malvisi Director February 16, 2024 John Malvisi /s/ Ziv Shoshani Director February 16, 2024 Ziv Shoshani /s/ Timothy V. Talbert Director February 16, 2024 Timothy V. Talbert /s/ Jeffrey H. Vanneste Director February 16, 2024 Jeffrey H. Vanneste /s/ Ruta Zandman Director February 16, 2024 Ruta Zandman /s/ Raanan Zilberman Director February 16, 2024 Raanan Zilberman 67 Vishay Intertechnology, Inc. Index to Consolidated Financial Statements Report of Independent Registered Public Accounting Firm (PCAOB ID: 42 ) F-2 Audited Consolidated Financial Statements Consolidated Balance Sheets F-4 Consolidated Statements of Operations F-6 Consolidated Statements of Comprehensive Income F-7 Consolidated Statements of Cash Flows F-8 Consolidated Statements of Stockholders’ Equity F-9 Notes to the Consolidated Financial Statements F-10 F-1 Report of Independent Registered Public Accounting Firm To the Stockholders and the Board of Directors of Vishay Intertechnology, Inc. Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Vishay Intertechnology, Inc. (the Company) as of December 31, 2023 and 2022, and the related consolidated statements of operations, comprehensive income, stockholders' equity, and cash flows for each of the three years in the period ended December 31, 2023, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2023, 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) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated February 16, 2024 expressed an unqualified opinion thereon. Basis for Opinion These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matter The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the account or disclosure to which it relates. F-2 Sales Returns and Allowances Accruals Description of the Matter At December 31, 2023, the Company’s liability for sales returns and allowances was $47.8 million. As discussed in Note 1 of the consolidated financial statements, the Company recognizes the estimated variable consideration to be received as revenue from contracts with customers and recognizes a related accrued liability for estimated future credits that will be issued to its customers, primarily distributors, for product returns, scrap allowance, “stock, ship and debit”, and price protection programs with those customers. Auditing management’s sales returns and allowances accruals specifically related to the scrap allowance and “stock, ship and debit” programs was especially challenging because of the judgement used by management to determine the amount of future credits that will be issued to customers for sales that were recognized during the period. Estimating the scrap allowance and "stock, ship and debit" accrual involves the application of models which require management to make certain assumptions including historical customer credit rates. How We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the Company’s sales returns and allowances review process for the scrap allowance and “stock, ship and debit” programs, including testing controls over management’s review of the reserve calculation and the underlying assumptions used to develop the estimates. To test the estimated sales returns and allowances accruals for the scrap allowance and “stock, ship and debit” programs, we performed audit procedures that included, among others, assessing methodologies and testing the assumptions discussed above and the completeness and accuracy of the underlying data used by the Company in its analyses. We inspected contracts with customers in evaluating whether the assumptions used by management agreed with the terms and conditions of the contracts. In addition, we compared the assumptions used by management to actual historical credit experience. We also assessed the historical accuracy of management’s estimates and performed sensitivity analyses of significant assumptions to evaluate the changes in the accruals that would result from changes in the assumptions. /s/ Ernst & Young LLP We have served as the Company's auditor since 1968. Philadelphia, Pennsylvania February 16, 2024 F-3 VISHAY INTERTECHNOLOGY, INC. Consolidated Balance Sheets (In thousands, except share amounts) December 31, 2023 December 31, 2022 Assets Current assets: Cash and cash equivalents $ 972,719 $ 610,825 Short-term investments 35,808 305,272 Accounts receivable, net of allowances for credit losses of $ 1,705 and $ 1,324 , respectively 426,674 416,178 Inventories: Finished goods 167,083 156,234 Work in process 267,339 261,345 Raw materials 213,098 201,300 Total inventories 647,520 618,879 Prepaid expenses and other current assets 214,443 170,056 Total current assets 2,297,164 2,121,210 Property and equipment, at cost: Land 77,006 75,907 Buildings and improvements 719,387 658,829 Machinery and equipment 3,053,868 2,857,636 Construction in progress 290,593 243,038 Allowance for depreciation ( 2,846,208 ) ( 2,704,951 ) Property and equipment, net 1,294,646 1,130,459 Right of use assets 126,829 131,193 Deferred income taxes 137,394 104,667 Goodwill 201,416 201,432 Other intangible assets, net 72,333 77,896 Other assets 110,141 98,796 Total assets $ 4,239,923 $ 3,865,653 Continues on following page. F-4 VISHAY INTERTECHNOLOGY, INC. Consolidated Balance Sheets (continued) (In thousands, except share amounts) December 31, 2023 December 31, 2022 Liabilities and equity Current liabilities: Trade accounts payable $ 191,002 $ 189,099 Payroll and related expenses 161,940 166,079 Lease liabilities 26,485 25,319 Other accrued expenses 239,350 261,606 Income taxes 73,098 84,155 Total current liabilities 691,875 726,258 Long-term debt, less current portion 818,188 500,937 U.S. transition tax payable 47,027 83,010 Deferred income taxes 95,776 117,183 Long-term lease liabilities 102,830 108,493 Other liabilities 87,918 92,530 Accrued pension and other postretirement costs 195,503 187,092 Total liabilities 2,039,117 1,815,503 Commitments and contingencies Stockholders' equity: Preferred stock, par value $ 1.00 per share: authorized - 1,000,000 shares; zero issued - - Common stock, par value $ 0.10 per share: authorized - 300,000,000 shares; 133,187,901 and 132,911,771 shares outstanding 13,319 13,291 Class B convertible common stock, par value $ 0.10 per share: authorized - 40,000,000 shares; 12,097,148 shares outstanding 1,210 1,210 Capital in excess of par value 1,291,499 1,352,321 Retained earnings 1,041,372 773,228 Treasury stock (at cost): 7,535,881 and 4,240,573 common shares ( 161,656 ) ( 82,972 ) Accumulated other comprehensive income (loss) 10,337 ( 10,827 ) Total Vishay stockholders' equity 2,196,081 2,046,251 Noncontrolling interests 4,725 3,899 Total equity 2,200,806 2,050,150 Total liabilities and equity $ 4,239,923 $ 3,865,653 See accompanying notes. F-5 VISHAY INTERTECHNOLOGY, INC. Consolidated Statements of Operations (In thousands, except per share amounts) Years ended December 31, 2023 2022 2021 Net revenues $ 3,402,045 $ 3,497,401 $ 3,240,487 Costs of products sold 2,427,552 2,438,412 2,352,574 Gross profit 974,493 1,058,989 887,913 Selling, general, and administrative expenses 488,349 443,503 420,111 Operating income 486,144 615,486 467,802 Other income (expense): Interest expense ( 25,131 ) ( 17,129 ) ( 17,538 ) Other 25,263 ( 4,852 ) ( 15,654 ) Loss on early extinguishment of debt ( 18,874 ) - - Total other income (expense) ( 18,742 ) ( 21,981 ) ( 33,192 ) Income before taxes 467,402 593,505 434,610 Income tax expense 141,889 163,022 135,673 Net earnings 325,513 430,483 298,937 Less: net earnings attributable to noncontrolling interests 1,693 1,673 967 Net earnings attributable to Vishay stockholders $ 323,820 $ 428,810 $ 297,970 Basic earnings per share attributable to Vishay stockholders: $ 2.32 $ 2.99 $ 2.05 Diluted earnings per share attributable to Vishay stockholders: $ 2.31 $ 2.98 $ 2.05 Weighted average shares outstanding - basic 139,447 143,399 145,005 Weighted average shares outstanding - diluted 140,246 143,915 145,495 Cash dividends per share $ 0.400 $ 0.400 $ 0.385 See accompanying notes. F-6 VISHAY INTERTECHNOLOGY, INC. Consolidated Statements of Comprehensive Income (In thousands) Years ended December 31, 2023 2022 2021 Net earnings $ 325,513 $ 430,483 $ 298,937 Other comprehensive income (loss), net of tax Pension and other post-retirement actuarial items ( 7,001 ) 51,310 18,167 Foreign currency translation adjustment 28,165 ( 41,885 ) ( 51,978 ) Other comprehensive income (loss) 21,164 9,425 ( 33,811 ) Comprehensive income 346,677 439,908 265,126 Less: comprehensive income attributable to noncontrolling interests 1,693 1,673 967 Comprehensive income attributable to Vishay stockholders $ 344,984 $ 438,235 $ 264,159 See accompanying notes. F-7 VISHAY INTERTECHNOLOGY, INC. Consolidated Statements of Cash Flows (In thousands) Years ended December 31, 2023 2022 2021 Operating activities Net earnings $ 325,513 $ 430,483 $ 298,937 Adjustments to reconcile net earnings to net cash provided by operating activities: Depreciation and amortization 184,373 163,991 167,037 Gain on disposal of property and equipment ( 554 ) ( 455 ) ( 303 ) Inventory write-offs for obsolescence 37,426 26,898 20,657 Pensions and other postretirement benefits, net of contributions ( 9,559 ) ( 615 ) 2,106 Stock compensation expense 16,532 6,545 6,605 Loss on early extinguishment of debt 18,874 - - Deferred income taxes 36,783 38,677 50,613 Other operating activities 9,442 835 9,621 Change in U.S. transition tax liability ( 27,670 ) ( 14,757 ) ( 14,757 ) Change in repatriation tax liability ( 63,600 ) ( 25,201 ) - Net change in operating assets and liabilities, net of effects of businesses acquired ( 161,857 ) ( 142,113 ) ( 83,412 ) Net cash provided by operating activities 365,703 484,288 457,104 Investing activities Capital expenditures ( 329,410 ) ( 325,308 ) ( 218,372 ) Proceeds from sale of property and equipment 1,156 1,198 1,317 Purchase of and deposits for businesses, net of cash acquired ( 13,753 ) ( 50,000 ) ( 20,847 ) Purchase of short-term investments ( 117,523 ) ( 285,956 ) ( 140,603 ) Maturity of short-term investments 387,898 132,901 147,893 Other investing activities ( 1,219 ) ( 1,766 ) 129 Net cash used in investing activities ( 72,851 ) ( 528,931 ) ( 230,483 ) Financing activities Proceeds from long-term borrowings 750,000 - - Repurchase of convertible debt instruments ( 386,745 ) - ( 300 ) Net proceeds (payments) on revolving credit facility ( 42,000 ) 42,000 - Debt issuance costs ( 26,823 ) - - Cash paid for capped call ( 94,200 ) - - Dividends paid to common stockholders ( 50,787 ) ( 52,348 ) ( 51,094 ) Dividends paid to Class B common stockholders ( 4,839 ) ( 4,839 ) ( 4,657 ) Repurchase of common stock held in treasury ( 78,684 ) ( 82,972 ) - Distributions to noncontrolling interests ( 867 ) ( 741 ) ( 800 ) Cash withholding taxes paid when shares withheld for vested equity awards ( 3,994 ) ( 2,123 ) ( 1,963 ) Net cash provided by (used in) financing activities 61,061 ( 101,023 ) ( 58,814 ) Effect of exchange rate changes on cash and cash equivalents 7,981 ( 17,617 ) ( 13,573 ) Net increase (decrease) in cash and cash equivalents 361,894 ( 163,283 ) 154,234 Cash and cash equivalents at beginning of year 610,825 774,108 619,874 Cash and cash equivalents at end of year $ 972,719 $ 610,825 $ 774,108 See accompanying notes F-8 VISHAY INTERTECHNOLOGY, INC. Consolidated Statements of Stockholders' Equity (In thousands, except share amounts) Common Stock Class B Convertible Common Stock Capital in Excess of Par Value Retained Earnings (Accumulated Deficit) Treasury Stock Accumulated Other Comprehensive Income (Loss) Total Vishay Stockholders' Equity Noncontrolling Interests Total Equity Balance at December 31, 2020 $ 13,256 $ 1,210 $ 1,409,200 $ 138,990 $ - $ 13,559 $ 1,576,215 $ 2,800 $ 1,579,015 Cumulative effect of accounting change for adoption of ASU 2020-06 - - ( 66,078 ) 20,566 - - ( 45,512 ) - ( 45,512 ) Net earnings - - - 297,970 - - 297,970 967 298,937 Other comprehensive income (loss) - - - - - ( 33,811 ) ( 33,811 ) - ( 33,811 ) Distributions to noncontrolling interests - - - - - - - ( 800 ) ( 800 ) Issuance of stock and related tax withholdings for vested restricted stock units ( 149,722 shares) 15 - ( 1,978 ) - - - ( 1,963 ) - ( 1,963 ) Dividends declared ($ 0.385 per share) - - 81 ( 55,832 ) - - ( 55,751 ) - ( 55,751 ) Stock compensation expense - - 6,605 - - - 6,605 - 6,605 Balance at December 31, 2021 $ 13,271 $ 1,210 $ 1,347,830 $ 401,694 $ - $ ( 20,252 ) $ 1,743,753 $ 2,967 $ 1,746,720 Net earnings - - - 428,810 - - 428,810 1,673 430,483 Other comprehensive income - - - - - 9,425 9,425 - 9,425 Distributions to noncontrolling interests - - - - - - - ( 741 ) ( 741 ) Issuance of stock and related tax withholdings for vested restricted stock units ( 201,039 shares) 20 - ( 2,143 ) - - - ( 2,123 ) - ( 2,123 ) Dividends declared ($ 0.400 per share) - - 89 ( 57,276 ) - - ( 57,187 ) - ( 57,187 ) Stock compensation expense - - 6,545 - - - 6,545 - 6,545 Repurchase of common stock held in treasury ( 4,240,573 shares) - - - - ( 82,972 ) - ( 82,972 ) - ( 82,972 ) Balance at December 31, 2022 $ 13,291 $ 1,210 $ 1,352,321 $ 773,228 $ ( 82,972 ) $ ( 10,827 ) $ 2,046,251 $ 3,899 $ 2,050,150 Net earnings - - - 323,820 - - 323,820 1,693 325,513 Other comprehensive income - - - - - 21,164 21,164 - 21,164 Distributions to noncontrolling interests - - - - - - - ( 867 ) ( 867 ) Issuance of stock and related tax withholdings for vested restricted stock units ( 276,130 shares) 28 - ( 4,022 ) - - - ( 3,994 ) - ( 3,994 ) Dividends declared ($ 0.400 per share) - - 50 ( 55,676 ) - - ( 55,626 ) - ( 55,626 ) Stock compensation expense - - 16,532 - - - 16,532 - 16,532 Repurchase of common stock held in treasury ( 3,295,308 shares) - - - - ( 78,684 ) - ( 78,684 ) - ( 78,684 ) Capped call transactions, net of tax - - ( 73,382 ) - - - ( 73,382 ) - ( 73,382 ) Balance at December 31, 2023 $ 13,319 $ 1,210 $ 1,291,499 $ 1,041,372 $ ( 161,656 ) $ 10,337 $ 2,196,081 $ 4,725 $ 2,200,806 See accompanying notes. F-9 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (dollars in thousands, except per share amounts) Vishay Intertechnology, Inc. (“Vishay” or the “Company”) manufactures one of the world’s largest portfolios of discrete semiconductors and passive electronic components that are essential to innovative designs in the automotive, industrial, military, aerospace, medical, power supplies, telecommunications, consumer products, and computing end markets. Semiconductors include MOSFETs, diodes, and optoelectronic components. Passive components include resistors, inductors, and capacitors. Note 1 – Summary of Significant Accounting Policies Use of Estimates The 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 in the consolidated financial statements and accompanying notes. Actual results could differ significantly from those estimates. Principles of Consolidation The consolidated financial statements include the accounts of Vishay and all of its subsidiaries in which a controlling financial interest is maintained. For those consolidated subsidiaries in which the Company’s ownership is less than 100 percent, the outside stockholders’ interests are shown as noncontrolling interests in the accompanying consolidated balance sheets. Investments in affiliates over which the Company has significant influence but not a controlling interest are carried on the equity basis. Investments in affiliates over which the Company does not have significant influence are accounted for by the cost method. All intercompany transactions, accounts, and profits are eliminated. Revenue Recognition The Company recognizes revenue from contracts with customers when it satisfies the performance obligations within the contract. The Company has framework agreements with many of its customers that contain the terms and conditions of future sales, but do not create enforceable rights or obligations. For revenue recognition purposes, the Company considers the combined purchase orders and the terms and conditions contained within such framework agreements to be contracts. Payment terms for the Company's sales are generally less than sixty days . Substantially all of the Company's receivables historically have been and are expected to continue to be collected within twelve months of the transfer of products to the customer and the Company expects this to continue going forward. Accordingly, the Company does not recognize a financing component of the transaction price. Revenue is measured based on the consideration specified in contracts with customers, and excludes any sales incentives and amounts collected on behalf of third parties. The Company recognizes revenue when it satisfies its performance obligations. The Company analyzes its contracts to determine whether the promise in the contract to construct and transfer goods to the customer is a performance obligation that will be satisfied over time or at a point in time. When the Company's performance does not create an asset with an alternative use to the Company and the Company has an enforceable right to payment for performance completed to date, the Company transfers control of a good or service over time and, therefore, satisfies a performance obligation and recognizes revenue over time. The Company has a limited number of contracts for custom products that meet the criteria to recognize revenue over time. The Company's contracts contain two performance obligations: delivery of products and warranty protection. The Company does not sell separate, enhanced, or extended warranty coverage, but through its customary business practices, the Company has created implied service-type warranties, which are accounted for as separate performance obligations. Revenue is allocated between these two performance obligations and recognized as the obligations are satisfied. The allocation of revenue to warranty protection is based on an estimate of expected cost plus margin. The delivery of products performance obligation is satisfied and product sales revenue is recognized when the customer takes control of the products. Warranty revenue is deferred and the warranty protection performance obligation is satisfied and revenue is recognized over the warranty period, which is typically less than twenty four months from sale to end customer. The warranty deferred revenue liability is recorded within Other Accrued Expenses and Other Liabilities on the accompanying consolidated balance sheets. The deferred revenue balance associated with the service-type warranty performance obligations and the components that comprise the change in the deferred revenue balance are not significant. The Company has a broad line of products that it sells to original equipment manufacturers ("OEMs"), electronic manufacturing services ("EMS") companies, which manufacture for OEMs on an outsourcing basis, and independent distributors that maintain large inventories of electronic components for resale to OEMs and EMS companies. F-10 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (dollars in thousands, except per share amounts) Note 1 – Summary of Significant Accounting Policies (continued) The Company recognizes revenue on sales to distributors when the distributor takes control of the products ("sold-to" model). The Company has agreements with distributors that 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 by distributors for credits on previously purchased products that remain in distributors' inventory, to enable the distributors to offer more competitive pricing. In addition, the Company has contractual arrangements whereby it provides distributors with protection against price reductions initiated by the Company after product is sold by the Company to the distributor and prior to resale by the distributor. The Company recognizes the estimated variable consideration to be received as revenue and records a related accrued expense for the consideration not expected to be received, based upon its estimate of product returns, scrap allowances, "stock, ship and debit" credits, and price protection credits that will be attributable to sales recorded through the end of the period. The Company makes these estimates based upon sales levels to its distributors during the period, inventory levels at the distributors, current and projected market conditions, and historical experience under the programs. The Company utilizes a number of different methodologies and considers several factors when estimating the accruals. Some of the factors considered include sales levels to distributors during the relevant period, inventory levels at the distributors, current and projected market trends and conditions, recent and historical activity under the relevant programs, changes in program policies, and open requests for credits. These procedures require the exercise of significant judgments. The Company believes that it has a reasonable basis to estimate future credits under the programs. See sales returns and allowances accrual activity in Note 9. The Company pays commissions to external sales representatives on a per-sale basis. Accordingly, these commissions are expensed as incurred because the future amortization period of the asset that the Company otherwise would have recognized is one year or less. Internal staff are not paid commissions. The Company has elected to account for shipping and handling as activities to fulfill the promise to transfer the product even if the shipping and handling activities are performed after the customer obtains control. The Company does not evaluate whether shipping and handling activities are promised services to its customers. If control transfers and revenue is recognized for the related products before the shipping and handling activities occur, the related costs of those shipping and handling activities is accrued. The Company applies this accounting policy election consistently to similar types of transactions. See disaggregated revenue information in Note 15 . Research and Development Expenses Research and development costs are expensed as incurred. The amount charged to expense for research and development (exclusive of purchased in-process research and development) aggregated $ 99,506 , $ 81,182 , and $ 77,377 , for the years ended December 31, 2023, 2022, and 2021, respectively. The Company spends additional amounts for the development of machinery and equipment for new processes and for cost reduction measures. Income Taxes The provision for income taxes is determined using the asset and liability approach of accounting for income taxes. Under this approach, deferred taxes represent the future tax consequences expected to occur when the reported amounts of assets and liabilities are recovered or paid. The provision for income taxes represents income taxes paid or payable for the current year plus the change in deferred taxes during the year. Deferred taxes result from differences between the financial and tax bases of the Company’s assets and liabilities and are adjusted for changes in tax rates and tax laws when changes are enacted. Valuation allowances have been established for deferred tax assets which the Company believes do not meet GAAP criteria of “more likely than not” to be realized. This criterion requires a level of judgment regarding future taxable income, which may be revised due to changes in market conditions, tax laws, or other 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 for which a valuation allowance has been established, then the related portion of the valuation allowance can be released, resulting in decreased tax expense. The Company and its subsidiaries are subject to income taxes in the U.S. and numerous foreign jurisdictions. Significant judgment is required in evaluating the Company’s tax positions and determining its provision for income taxes. During the ordinary course of business, there are many transactions and calculations for which the ultimate tax determination is uncertain. The Company establishes reserves for tax-related uncertainties based on estimates of whether, and the extent to which, additional taxes will be due. These reserves are established when the Company believes that certain positions might be challenged despite the Company’s belief that its tax return positions are fully supportable. The Company adjusts these reserves in light of changing facts and circumstances and the provision 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 particular matters arise, a number of years may elapse before such matters are audited by tax authorities and finally resolved. Favorable resolution of such matters could be recognized as a reduction to the Company’s effective tax rate in the year of resolution. Unfavorable resolution of any particular issue could increase the effective tax rate and may require the use of cash in the year of resolution. The amount included in current liabilities on the accompanying consolidated balance sheets reflect only amounts expected to be settled in cash within one year. See Note 5. F-11 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (dollars in thousands, except per share amounts) Note 1 – Summary of Significant Accounting Policies (continued) Cash, Cash Equivalents, and Short-Term Investments Cash and cash equivalents includes demand deposits and highly liquid investments with maturities of three months or less when purchased. Highly liquid investments with original maturities greater than three months, but less than one year are classified as short-term investments. At December 31, 2023 and 2022, the Company’s short-term investments were comprised of time deposits with financial institutions whose original maturity exceeds three months, but less than one year. Allowance for Credit Losses The Company estimates its credit losses on financial instruments using a current expected credit loss model. The Company maintains an allowance for accounts receivable credit losses resulting from the inability of its customers to make required payments. Payment terms for the Company's sales are generally less than ninety days. Substantially all of the Company's trade receivables are collected within twelve months of the transfer of products to the customer and the Company expects this to continue going forward. The credit loss allowance is determined through an analysis of the aging of accounts receivable and assessments of risk that are based on historical trends and an evaluation of the impact of current and projected economic conditions. Receivables from customers with deteriorating financial condition and those over 180 days past due are removed from the pool and evaluated separately. Net credit loss expense for accounts receivable was $ 369 , $ 365 , and $ 384 for the years ended December 31, 2023 , 2022 , and 2021 , respectively. The Company’s cash equivalents, short-term investments, and restricted investments are accounted for as held-to-maturity debt instruments, at amortized cost. Interest income on these instruments is recorded as "Other income" on the consolidated statements of operations and interest receivable is recognized as a separate asset and recorded in "Prepaid expenses and other current assets" on the consolidated balance sheets. The Company has not experienced a credit loss on the principal or interest receivable of its cash equivalents, short-term investments, or restricted investments. The Company pools its cash equivalents, short-term investments, and restricted investments by credit rating of the issuing financial institution and estimates an allowance for credit losses based on the corporate bond default ratios, evaluation of the impact of current and projected economic conditions, and probability of credit loss. Net credit loss expense for cash equivalents, short-term investments, and restricted investments was immaterial for the years ended December 31, 2023 and 2022. The Company does not measure an allowance for credit losses on interest receivable. Any uncollectible interest receivable is recognized by reversing interest income within the fiscal quarter that the interest becomes uncollectible. Inventories Inventories are stated at the lower of cost, determined by the first-in, first-out method, or net realizable value. Inventories are adjusted for estimated obsolescence and written down to net realizable value based upon estimates of future demand, technology developments, and market conditions. Property and Equipment Property and equipment is carried at cost and is depreciated principally by the straight-line method based upon the estimated useful lives of the assets. Machinery and equipment are being depreciated over useful lives of seven years to ten years . Buildings and building improvements are being depreciated over useful lives of twenty years to forty years . Construction in progress is not depreciated until the assets are placed in service. The estimated cost to complete construction in progress at December 31, 2023 was approximately $ 502,500 . Included in the estimated cost to complete the Itzehoe, Germany 12-inch wafer fab construction project are certain costs for which there are currently no contractual commitments to complete . Depreciation expense was $ 174,457 , $ 155,864 , and $ 159,247 for the years ended December 31, 2023 , 2022, and 2021 , respectively. Gains and losses on the disposal of assets which do 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 the consolidated financial statements. Commitments and Contingencies The Company has commitments for the purchase of assets to complete its construction in progress as disclosed above. The commitment period for substantially all of these purchase commitments is less than one year. The Company expects to have noncancellable purchase commitments with commitment periods in excess of one year associated with its significant facility expansion programs as the programs progress. As of December 31, 2023, there are no material noncancellable commitments associated with these programs. F-12 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (dollars in thousands, except per share amounts) Note 1 – Summary of Significant Accounting Policies (continued) Liabilities 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/or remediation can be reasonably estimated. The costs for a specific environmental remediation site are discounted if the aggregate amount of the obligation and the amount and timing of the cash payments for that site are fixed or reliably determinable based upon information derived from the remediation plan for that site. Accrued liabilities for environmental matters recorded at December 31, 2023 and 2022 do not include claims against third parties. Goodwill and Other Intangible Assets Goodwill 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 intangible assets may be assigned indefinite useful lives. Goodwill and indefinite-lived intangible assets are not amortized but rather are tested for impairment at least annually. These tests are performed more frequently whenever events or changes in circumstances indicate that the assets might be impaired. The Company's business segments (see Note 15) represent its reporting units for goodwill impairment testing purposes. At December 31, 2023 and 2022, respectively, the Company has no recorded indefinite-lived intangible assets. Definite-lived intangible assets are amortized over their estimated useful lives. Patents and acquired technology are being amortized over useful lives of seven years to twenty-five years . Capitalized software is amortized over periods of three years to ten years , primarily included in "Costs of products sold" on the consolidated statements of operations. Customer relationships are amortized over useful lives of five years to twenty years . Noncompete agreements are amortized over periods of three years to ten years . The Company continually evaluates the reasonableness of the useful lives of these assets. GAAP prescribes a quantitative method for determining goodwill impairment. The Company has the option of performing a qualitative assessment before performing the 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 quantitative impairment test 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, the quantitative impairment test is required. The Company determines the fair value of the reporting unit and compares that fair value to the net book value of the reporting unit. The fair value of the reporting unit is determined using various valuation techniques, including a comparable companies market multiple approach and a discounted cash flow analysis (an income approach). If the net book value of the reporting unit were to exceed the fair value, the Company would recognize an impairment charge. Impairment of Long-Lived Assets The carrying value of long-lived assets held-and-used, other than goodwill and indefinite-lived intangible assets, is evaluated when events or changes in circumstances indicate the carrying value may not be recoverable or the useful life has changed. The carrying value of a long-lived asset group is considered impaired when the total projected undiscounted cash flows from such asset group are separately identifiable and are less than the carrying value. In that event, a loss is recognized based on the amount by which the carrying value exceeds the fair market value of the long-lived asset group. Fair market value is determined primarily using present value techniques based on projected cash flows from the asset group. Losses on long-lived assets held-for-sale, other than goodwill and indefinite-lived intangible assets, are determined in a similar manner, except that fair market values are reduced for anticipated disposal costs. Available-for-Sale Securities Short-term investments and other assets reported on the accompanying consolidated balance sheets include time deposits with financial institutions whose original maturity exceeds three months, but less than one year that are classified as held-to-maturity instruments, and investments in marketable securities that are classified as available-for-sale instruments. The available-for-sale instruments include assets that are held in trust related to the Company’s non-qualified pension and deferred compensation plans (see Note 11) and assets that are intended to fund a portion of the Company’s other postretirement benefit obligations outside of the U.S. These assets are reported at fair value, based on quoted market prices as of the end of the reporting period. Unrealized gains and losses are reported as "Other income (expense)" on the consolidated statements of operations. At the time of sale, the assets that are held in trust related to the Company’s non-qualified pension and deferred compensation plans, any gains (losses) calculated by the specific identification method are recognized as a reduction (increase) to benefits expense, within "Selling, general, and administrative expenses" on the consolidated statements of operations. Financial Instruments The Company uses financial instruments in the normal course of its business, including from time to time, derivative financial instruments. Additionally, from time to time, the Company enters into contracts that are not considered derivative financial instruments in their entirety, but that include embedded derivative features. Other financial instruments include cash and cash equivalents, held-to-maturity short-term investments, accounts receivable, and notes payable. The carrying amounts of these financial instruments reported on the accompanying consolidated balance sheets approximate their fair values due to the short-term nature of these assets and liabilities. F-13 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (dollars in thousands, except per share amounts) Note 1 – Summary of Significant Accounting Policies (continued) The fair value measurement accounting guidance establishes a valuation hierarchy of the inputs used to measure fair value. This hierarchy prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The following is a brief description 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. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities 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 value measurement. Stock-Based Compensation Compensation costs related to stock-based payment transactions are recognized in the consolidated financial statements. The amount of compensation cost is measured based on the grant-date fair value of the equity (or liability) instruments issued. The Company determines compensation cost for restricted stock units ("RSUs") and phantom stock units based on the grant-date fair value of the underlying common stock adjusted for expected dividends paid over the required vesting period for non-participating awards. Compensation cost is recognized over the period that an officer, employee, or non-employee director is required to provide service in exchange for the award. For RSUs with market conditions, the Company estimates the grant date fair value using a Monte Carlo valuation model and recognizes the expense for the awards over the period in which the condition is assessed regardless of whether the market condition is ultimately achieved. For awards subject to graded vesting, the Company recognizes expense over the service period for each separately vesting portion of the award as if the award was, in-substance, multiple awards. The Company recognizes compensation cost for RSUs that are expected to vest and records cumulative adjustments in the period that the expectation changes. Foreign Currency Translation The Company has significant operations outside of the United States. The Company finances its operations in Europe and certain locations in Asia in local currencies, and accordingly, these subsidiaries utilize the local currency as their functional currency. The Company’s operations in Israel and most significant locations in Asia are largely financed in U.S. dollars, and accordingly, these subsidiaries 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 accompanying consolidated balance sheets have been translated at the rate of exchange as of the balance sheet date. Translation adjustments do not impact the consolidated results of operations and are reported as a separate component of stockholders’ equity. Revenues and expenses are translated at the average exchange rate for the year. While the translation of revenues and expenses into U.S. dollars does not directly impact the statement of operations, the translation effectively increases or decreases the U.S. dollar equivalent of revenues generated and expenses incurred in those foreign currencies. For those foreign subsidiaries where the U.S. dollar is the functional currency, all foreign currency financial statement amounts are remeasured into U.S. dollars. Exchange gains and losses arising from remeasurement of foreign currency-denominated monetary assets and liabilities are included in the consolidated results of operations. Treasury Stock The Company records treasury stock at cost, inclusive of fees, commissions and other expenses, when outstanding common shares are repurchased. Self-Insurance Programs The 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. At December 31, 2023, the captive insurance entity provides only property and general liability insurance, although it is licensed to also provide directors’ and officers’ insurance. The captive insurance entity had no amounts accrued for outstanding claims at December 31, 2023 and 2022. Certain investments held by the captive insurance entity are restricted primarily for the purpose of potential insurance claims. Such amounts are recorded in other noncurrent assets, and total $ 10,571 and $ 9,352 at December 31, 2023 and 2022, respectively, representing required statutory reserves of the captive insurance entity. F-14 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (dollars in thousands, except per share amounts) Note 1 – Summary of Significant Accounting Policies (continued) Leases The Company leases buildings and machinery and equipment used for manufacturing and/or sales and administrative purposes. The Company is also party to various service, warehousing, and other agreements that it evaluates for potential embedded leases. Substantially all of the Company’s leases are structured and classified as operating leases. The Company leases assets in each region in which it operates. The Company’s leases are generally denominated in the currency of the leased assets' location, which may not be the functional currency of the subsidiary lessee. Accordingly, the Company remeasures its lease liability and recognizes a transactional gain/loss for leases denominated in currencies other than the functional currency of the subsidiary lessee. The Company recognizes right of use assets and lease liabilities for leases greater than twelve months in duration based on the contract consideration for lease components through the term of the lease and the applicable discount rate. Leases with a duration less than or equal to twelve months are considered short-term leases. The Company does not recognize right of use assets or lease liabilities for short-term leases and classifies the expense as short-term lease expense. Variable lease payments based on an index or rate are included in the right of use assets and lease liabilities based on the effective rates at lease commencement. Changes in the rates or indices do not impact the right of use asset or lease liability and are recognized as a component of lease expense in the consolidated statements of operations. Variable lease payments not based on an index or rate are not included in the initial right of use asset and lease liability and are recognized when incurred as a component of lease expense in the consolidated statements of operations. The Company has elected to not separate contract consideration for lease and non-lease components for its building leases. In addition to the noncancellable period of a lease, the Company includes periods covered by extension options it is reasonably certain to exercise, termination options that it is reasonably certain not to exercise, and extension and termination options controlled by the lessor in its determination of the lease term. The Company uses the rate implicit in the contract whenever possible when determining the applicable discount rate. When the implicit rate is not used, the Company employs a portfolio approach based on the duration of the lease. The portfolio lease rates are calculated monthly. No individual lease is considered significant and there are no leases that have not yet commenced that are considered significant. See Note 4 for additional information. Restructuring and Severance Costs Restructuring and severance costs reflect charges resulting from cost reduction programs implemented by the Company. Restructuring and severance costs include exit costs, severance benefits pursuant to an on-going arrangement, voluntary termination compensation under 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 sufficiently detailed to provide the number, classification, and location of employees to be terminated as well as the expected completion date, the plan has been sufficiently communicated to employees such that they are able to determine the type and amount of benefits they will receive if terminated, and it is unlikely that the plan will be significantly changed or withdrawn. If an employee is not required to render 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 that the employee is required to render future service. The Company recognizes expense for on-going benefit arrangements when the liability is reasonably estimable and considered probable. The Company recognizes expense for voluntary separation / early retirement when the employee delivers an irrevocable voluntary termination notice pursuant to a defined Company program. The Company recognizes other exit costs as incurred. The Company paid cash of $ 11,474 in the year ended December 31, 2021 due to a restructuring program announced in 2019. The program was substantially completed as of December 31, 2021. Recent Accounting Pronouncements Recent Accounting Guidance Not Yet Adopted In November 2023, the Financial Accounting Standards Board ("FASB") issued ASU No. 2023-07, Improvements to Reportable Segment Disclosures . The ASU adds reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses, requires additional interim disclosures, and requires other segment-related disclosures. The ASU is effective for the Company for interim and annual periods beginning on or after January 1, 2024, with the ability to early adopt. The Company adopted the ASU effective January 1, 2024. The adoption of the ASU will not impact the Company's reportable segments' results of operations or cash flows, but will increase its segment disclosures. Reclassifications Certain prior year amounts have been reclassified to conform with current year presentation. Such reclassifications had no effect on reported net earnings attributable to Vishay stockholders, total assets, stockholders' equity, or the statements of cash flows. F-15 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (dollars in thousands, except per share amounts) Note 2 - Acquisition and Divestiture Activities As part of its growth strategy, the Company seeks to expand through targeted acquisitions of other manufacturers of electronic components. These acquisition targets include businesses that have established positions in major markets, reputations for product quality and reliability, and product lines with which the Company has substantial marketing and technical expertise. It also includes certain businesses that possess technologies which the Company expects to further develop and commercialize. Year ended December 31, 2023 Neptune 6 Limited On November 8, 2023 , Vishay and Nexperia BV announced that they have entered into an agreement whereby Vishay will acquire Nexperia’s wafer fabrication facility and operations located in Newport, South Wales, U.K. for approximately $ 177,000 in cash, subject to customary post-closing adjustments. On November 8, 2023, Vishay remitted $ 8,750 to an escrow account as a deposit for the acquisition. Such amount is included within "Purchase of and deposits for businesses, net of cash acquired" on the consolidated statement of cash flows. To effect the transaction, Vishay will acquire a 100 % interest in the legal entity Neptune 6 Limited , and its wholly-owned operating subsidiary, Nexperia Newport Limited, which owns and operates the Newport facility. The closing of the transaction is subject to U.K. government review and customary closing conditions, and is expected to occur in the first quarter of 2024. Centerline Technologies, LLC On June 30, 2023 , the Company acquired substantially all of the assets of Centerline Technologies, LLC ("Centerline"), a Massachusetts-based, privately held manufacturer of ceramic components used in many custom parts manufactured by certain of Vishay's Resistors businesses, for $ 5,003 . Based on an estimate of fair values, the Company allocated $ 1,500 of the purchase price to definite-lived intangible assets. After allocating the purchase price to the assets acquired and liabilities assumed based on an estimation of their fair values at the date of acquisition, the Company recorded goodwill of $ 2,213 related to this acquisition. The acquired business will be vertically integrated into the Company's Resistors segment, and the goodwill related to this acquisition is included in the Resistors reporting unit for goodwill impairment testing. The results and operations of this acquisition have been included in the Resistors segment since June 30, 2023. Year ended December 31, 2022 On October 28, 2022 , the Company acquired all of the outstanding equity interests of MaxPower Semiconductor, Inc. , ("MaxPower"), a San Jose, California-based fabless power semiconductor provider dedicated to delivering innovative and cost-effective technologies that optimize power management solutions. The acquisition of MaxPower will enhance Vishay's current and future silicon carbide ("SiC") offerings for fast-growing markets such as electric vehicles. The Company paid cash of $ 50,000 , net of cash acquired, at closing. The transaction also included possible contingent payments of up to $ 57,500 , which would be payable upon the achievement of certain technology milestones, upon favorable resolution of certain technology licensing matters with a third party, and upon the disposition of MaxPower's investment in an equity affiliate. The purchase price for U.S. GAAP purposes includes the fair value, as of the acquisition date, of certain future contingent payments to non-employee equity holders of MaxPower. The estimated fair value of this contingent consideration as of the acquisition date was $ 6,851 . The contingent consideration liability is included in other accrued expenses and other liabilities in the accompanying balance sheet and is remeasured each reporting period, with changes reported as "Selling, general, and administrative expenses" on the consolidated statements of operations. A portion of contingent payments to be made to employee equity holders are deemed compensatory in nature. Such payments made to employee equity holders will be recognized as expense in future periods, and thus are not included in the U.S. GAAP purchase price. One of the contingencies was resolved in the fourth quarter of 2023, which resulted in no additional payments to the former employees and stockholders of MaxPower. Significant developments occurred in another of the contingencies in January 2024. The Company's estimate of the maximum possible contingent payments is $ 17,500 . See Note 18 for further discussion on the fair value measurement of the contingent consideration liability. Based on an estimate of their fair values, the Company allocated $ 18,600 of the purchase price to definite-lived intangible assets. After allocating the purchase price to the assets acquired and liabilities assumed based on an estimation of their fair values at the date of acquisition, the Company recorded goodwill of $ 34,246 related to this acquisition. The results and operation of this acquisition have been included in the MOSFETs segment since October 28, 2022. The goodwill related to this acquisition is included in the MOSFETs reporting unit for goodwill impairment testing. Year ended December 31, 2021 On December 31, 2021 , the Company acquired substantially all of the U.S. assets of Barry Industries , a Massachusetts-based, privately-held manufacturer of resistive components for $ 20,847 . Based on an estimate of their fair values, the Company allocated $ 9,600 of the purchase price to definite-lived intangible assets. After allocating the purchase price to the assets acquired and liabilities assumed based on an estimation of their fair values at the date of acquisition, the Company recorded goodwill of $ 7,813 related to this acquisition. The results and operations of this acquisition have been included in the Resistors segment since December 31, 2021. The goodwill related to this acquisition is included in the Resistors reporting unit for goodwill impairment testing. F-16 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (dollars in thousands, except per share amounts) Note 3 – Goodwill and Other Intangible Assets The Company performs its annual goodwill impairment test as of the first day of the fiscal fourth quarter. No impairment was identified as a result of the Company's annual impairment tests for 2023, 2022, and 2021. The changes in the carrying amount of goodwill by segment for the years ended December 31, 2023 and 2022 were as follows: MOSFETs Optoelectronic Components Resistors Inductors Total Balance at December 31, 2021 $ - $ 96,849 $ 42,605 $ 25,815 $ 165,269 MaxPower acquisition 36,885 - - - 36,885 Exchange rate effects - - ( 722 ) - ( 722 ) Balance at December 31, 2022 $ 36,885 $ 96,849 $ 41,883 $ 25,815 $ 201,432 Centerline acquisition - - 2,213 - 2,213 Purchase price allocation adjustment ( 2,639 ) - - - ( 2,639 ) Exchange rate effects - - 410 - 410 Balance at December 31, 2023 $ 34,246 $ 96,849 $ 44,506 $ 25,815 $ 201,416 Other intangible assets are as follows: December 31, 2023 December 31, 2022 Intangible assets subject to amortization: Patents and acquired technology $ 26,053 $ 26,988 Capitalized software 62,360 58,735 Customer relationships 83,895 82,816 Tradenames 22,300 22,933 Other 400 400 195,008 191,872 Accumulated amortization: Patents and acquired technology ( 14,931 ) ( 14,743 ) Capitalized software ( 54,203 ) ( 53,348 ) Customer relationships ( 38,664 ) ( 33,021 ) Tradenames ( 14,610 ) ( 12,731 ) Other ( 267 ) ( 133 ) ( 122,675 ) ( 113,976 ) Net intangible assets subject to amortization $ 72,333 $ 77,896 Amortization expense (excluding capitalized software) was $ 9,916 , $ 8,127 , and $ 7,790 , for the years ended December 31, 2023, 2022, and 2021, respectively. Estimated annual amortization expense of intangible assets on the balance sheet at December 31, 2023 for each of the next five years is as follows: 2024 $ 9,832 2025 9,372 2026 8,555 2027 6,734 2028 5,975 F-17 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (dollars in thousands, except per share amounts) Note 4 – Leases The net right of use assets and lease liabilities recognized on the consolidated balance sheets for the Company's operating leases as of December 31, 2023 and 2022 are presented below: December 31, 2023 December 31, 2022 Right of use assets Operating Leases Buildings and improvements $ 121,578 $ 126,933 Machinery and equipment 5,251 4,260 Total $ 126,829 $ 131,193 Current lease liabilities Operating Leases Buildings and improvements $ 23,647 $ 22,926 Machinery and equipment 2,838 2,393 Total $ 26,485 $ 25,319 Long-term lease liabilities Operating Leases Buildings and improvements $ 100,489 $ 106,693 Machinery and equipment 2,341 1,800 Total $ 102,830 $ 108,493 Total lease liabilities $ 129,315 $ 133,812 Lease expense is classified in the statements of operations based on asset use. Total lease cost recognized on the consolidated statements of operations is as follows: Years ended December 31, 2023 2022 2021 Lease expense Operating lease expense $ 27,909 $ 25,606 $ 24,853 Short-term lease expense 988 971 2,031 Variable lease expense 566 365 359 Total lease expense $ 29,463 $ 26,942 $ 27,243 The Company paid $ 28,164 , $ 24,074 , and $ 23,899 for its operating leases during the years ended December 31, 2023, 2022, and 2021, respectively, which are included in operating cash flows on the consolidated statements of cash flows. The weighted-average remaining lease term for the Company's operating leases is 9.4 years and the weighted-average discount rate is 6.3 % as of December 31, 2023. The undiscounted future lease payments for the Company's operating lease liabilities are as follows: 2024 $ 27,474 2025 24,235 2026 19,692 2027 17,802 2028 15,154 Thereafter 68,809 The undiscounted future lease payments presented in the table above include payments through the term of the lease, which may include periods beyond the noncancellable term. The difference between the total payments above and the lease liability balance is due to the discount rate used to calculate lease liabilities. F-18 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (dollars in thousands, except per share amounts) Note 5 – Income Taxes Changes in Tax Laws and Regulations Israel Effective November 15, 2021, Israel enacted changes in its tax laws. As a direct result of this change in tax law, the Company made the determination during the fourth fiscal quarter of 2021 that substantially all unremitted foreign earnings in Israel were no longer indefinitely reinvested. The Company recorded additional tax expense of $ 53,316 during the fourth fiscal quarter of 2021 to accrue the claw-back tax on applicable earnings and withholding taxes necessary to distribute these approximately $ 385,000 of accumulated earnings to the United States. The Company repatriated $ 81,243 to the United States in 2022 pursuant to this repatriation program. The Company paid withholding taxes, foreign taxes, and Israeli clawback taxes of $ 25,201 due to the repatriation. United States On December 22, 2017, the Tax Cuts and Jobs Act (the "TCJA") was enacted in the United States. Under previous law, companies could indefinitely defer U.S. income taxation on unremitted foreign earnings. The TCJA imposed a one-time transition tax on deferred foreign earnings, payable in defined increments over eight years. Installments of $ 27,670 were paid in 2023 and $ 14,757 were paid in each of 2022, 2021, 2020, 2019, and 2018. The Company expects future installment payments as follows: 2024 $ 37,622 2025 47,027 The U.S. Internal Revenue Service continues to issue regulations to address the provisions of the TCJA. During 2021, the Company amended tax returns for 2018 and 2019 and recognized tax benefits of $ 8,276 as a result of changes in tax regulations, by making an election regarding Global Intangible Low-Taxed Income (“GILTI”). The Company has elected to account for GILTI tax in the period in which it is incurred and, therefore, does not provide any deferred taxes in the consolidated financial statements at December 31, 2023, 2022, or 2021. Change in Indefinite Reversal Assertion The Company made the determination during the fourth fiscal quarter of 2022 that substantially all unremitted earnings in Germany are no longer indefinitely reinvested. Additional tax expense was recorded during the fourth fiscal quarter of 2022 to accrue the $ 59,642 of withholding taxes necessary to distribute these approximately $ 360,000 of accumulated earnings to the United States. These changes in this indefinite reinvestment assertion provide greater access to the Company's worldwide cash balances to fund its growth plan and its Stockholder Return Policy. While the change in assertion provides access to these balances, these amounts will be repatriated only as needed. The withholding taxes associated with any distribution to the United States is payable upon distribution. During the fourth fiscal quarter of 2023, the Company repatriated $ 325,000 of accumulated earnings to the United States and paid withholding taxes, in Germany and Israel, of $ 63,600 . At December 31, 2023, approximately $ 218,000 of German earnings and approximately $ 380,000 of Israeli earnings are deemed not indefinitely reinvested. The aggregate tax liability recorded for unremitted earnings at December 31, 2023 is approximately $ 86,000 , which includes amounts accrued subsequent to the changes in indefinite reinvestment determinations described above. There are amounts of unremitted foreign earnings in countries other than Israel and Germany, which continue to be reinvested indefinitely, and the Company has made no provision for incremental foreign income taxes and withholding taxes payable to foreign jurisdictions related to these amounts. Determination of the amount of the unrecognized deferred foreign tax liability for these amounts is not practicable because of the complexities associated with its hypothetical calculation. F-19 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (dollars in thousands, except per share amounts) Note 5 – Income Taxes (continued) Income before taxes consists of the following components: Years ended December 31, 2023 2022 2021 Domestic $ 67,938 $ 132,426 $ 62,921 Foreign 399,464 461,079 371,689 $ 467,402 $ 593,505 $ 434,610 Significant components of income taxes are as follows: Years ended December 31, 2023 2022 2021 Current: Federal $ 14,594 $ 24,423 $ 2,336 State and local 1,769 3,313 466 Foreign 152,343 121,810 82,258 168,706 149,546 85,060 Deferred: Federal ( 4,871 ) ( 40,136 ) 554 State and local ( 3,651 ) 532 383 Foreign ( 18,295 ) 53,080 49,676 ( 26,817 ) 13,476 50,613 Total income tax expense $ 141,889 $ 163,022 $ 135,673 F-20 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 for financial reporting purposes and the amounts for income tax purposes. Significant components of the Company’s deferred tax assets and liabilities are as follows: December 31, 2023 2022 Deferred tax assets: Pension and other retiree obligations $ 29,400 $ 29,327 Inventories 23,836 21,040 Net operating loss carryforwards 81,497 82,498 Tax credit carryforwards 54,363 53,145 Research and development costs 17,829 7,704 Original issue discount interest 20,039 - Other accruals and reserves 25,179 29,930 Total gross deferred tax assets 252,143 223,644 Less valuation allowance ( 99,663 ) ( 101,169 ) 152,480 122,475 Deferred tax liabilities: Property and equipment ( 9,429 ) ( 8,307 ) Tax deductible goodwill ( 7,040 ) ( 6,144 ) Earnings not indefinitely reinvested ( 88,004 ) ( 113,661 ) Other - net ( 6,389 ) ( 6,879 ) Total gross deferred tax liabilities ( 110,862 ) ( 134,991 ) Net deferred tax assets (liabilities) $ 41,618 $ ( 12,516 ) The Company makes significant judgments regarding the realizability of its deferred tax assets (principally net operating losses and tax credits). The carrying value of deferred tax assets is based on the Company’s assessment that it is more likely than not that the Company will realize these 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, 2023 2022 2021 Tax at statutory rate $ 98,154 $ 124,636 $ 91,268 State income taxes, net of U.S. federal tax benefit ( 1,487 ) 3,038 671 Effect of foreign operations 9,260 13,422 5,521 Tax on earnings not indefinitely reinvested 37,061 71,141 54,648 Unrecognized tax benefits 1,999 ( 4,699 ) 1,318 Change in valuation allowance on deferred tax assets ( 1,770 ) ( 58,696 ) ( 14,921 ) Foreign income taxable in the U.S. 11,829 14,925 9,532 Foreign tax credit ( 29,997 ) ( 20,408 ) ( 9,477 ) U.S. Base Erosion Anti-Abuse Tax 16,837 20,918 9,134 Change in U.S. tax regulations - - ( 8,276 ) Other 3 ( 1,255 ) ( 3,745 ) Total income tax expense $ 141,889 $ 163,022 $ 135,673 F-21 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (dollars in thousands, except per share amounts) Note 5 – Income Taxes (continued) Vishay operates in a global environment with significant operations in various locations outside the United States. Accordingly, the consolidated income tax rate is a composite rate reflecting our earnings and the applicable tax rates in the various locations where we operate. Part of Vishay's historical strategy has been to achieve cost savings through the transfer and expansion of manufacturing operations to countries where it can take advantage of lower labor costs and available tax and other government-sponsored incentives. With the reduction in the U.S. statutory rate to 21% beginning January 1, 2018, Vishay expects that its effective tax rate will be higher than the U.S. statutory rate, excluding unusual transactions. Historically, the effective tax rates were generally less than the U.S. statutory rate of 35% primarily because of earnings in foreign jurisdictions. Income tax expense for the years ended December 31, 2022 and 2021 includes certain discrete tax items for changes in uncertain tax positions, valuation allowances, tax rates, and other related items. These items total $ 20,032 , and $ 39,326 in 2022 and 2021, respectively. There were no unusual tax items for the year ended December 31, 2023. For the year ended December 31, 2022, the discrete items include tax expense of $ 59,642 due to the Company's change in its assertion that earnings of its subsidiaries in Germany are indefinitely reinvested, tax benefits of $ 5,941 for changes in uncertain tax positions following the resolution of a tax audit and a $ 33,669 tax benefit recognized upon the release of a valuation allowance. For the year ended December 31, 2021, the discrete items include $ 53,316 of tax expense recognized to accrue the claw-back and withholding taxes to repatriate unremitted foreign earnings from Israel, a $ 5,714 tax benefit recognized upon the release of a valuation allowance and $ 8,276 of tax benefits recognized due to changes in tax regulations. At December 31, 2023, the Company had the following significant net operating loss carryforwards for tax purposes: Expires Belgium $ 154,735 No expiration Israel 5,364 No expiration Japan 4,704 2025 - 2033 Netherlands 10,324 No expiration The Republic of China (Taiwan) 11,728 2026 - 2028 California 16,517 2028 - 2037 Pennsylvania 549,914 2024 - 2043 Arizona 15,516 2032 - 2040 At December 31, 2023, the Company had the following significant tax credit carryforwards available: Expires U.S. Foreign Tax Credit $ 32,468 2028 - 2030 California Research Credit 20,983 No expiration F-22 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (dollars in thousands, except per share amounts) Note 5 – Income Taxes (continued) Net income taxes paid were $ 224,232 , $ 134,199 , and $ 79,106 for the years ended December 31, 2023, 2022, and 2021, respectively. Net income taxes paid for the years ended December 31, 2023 and 2022 include withholding taxes for repatriation activity. Net income taxes paid for the years ended December 31, 2023, 2022, and 2021 also includes $ 27,670 , $ 14,757 , and $ 14,757 , respectively, for the TCJA transition tax. The following table summarizes changes in the liabilities associated with unrecognized tax benefits: Years ended December 31, 2023 2022 2021 Balance at beginning of year $ 18,429 $ 26,719 $ 40,652 Addition based on tax positions related to the current year 1,210 - 141 Addition based on tax positions related to prior years 5,455 3,197 1,037 Currency translation adjustments 230 ( 366 ) ( 523 ) Reduction based on tax positions related to prior years - - ( 13,154 ) Reduction for settlements ( 10,000 ) ( 9,420 ) ( 982 ) Reduction for lapses of statute of limitation ( 2,467 ) ( 1,701 ) ( 452 ) Balance at end of year $ 12,857 $ 18,429 $ 26,719 All of the unrecognized tax benefits of $ 12,857 and $ 18,429 , as of December 31, 2023 and 2022, respectively, would reduce the effective tax rate if recognized. The Company recognizes interest and penalties related to unrecognized tax benefits in income tax expense. At December 31, 2023 and 2022, the Company had accrued interest and penalties related to the unrecognized tax benefits of $ 1,947 and $ 2,587 , respectively. During the years ended December 31, 2023, 2022, and 2021, the Company recognized $ 821 , $ 376 , and $ 591 , respectively, in interest and penalties. The Company and its subsidiaries file U.S. federal income tax returns, as well as tax returns in multiple states and foreign jurisdictions. During the years ended December 31, 2023, 2022, and 2021, certain tax examinations were concluded and certain statutes of limitations lapsed. The tax provision for those years includes adjustments related to the resolution of these matters, as reflected in the table above. During 2023, the Company settled an examination of its U.S. federal income tax returns for the years ended December 31, 2017 through 2019. The federal income tax returns for subsequent years remain subject to examination. The tax returns of significant non-U.S. subsidiaries currently under examination are located in the following jurisdictions: Israel (2021), Germany (2017 through 2021), India (2004 through 2021), and Philippines (2017 through 2022). The Company and its subsidiaries also file income tax returns in other taxing jurisdictions in the U.S. and around the world, many of which are still open to examination. The timing of the resolution of income tax examinations is highly uncertain, as are the amounts and timing of tax payments that result from such examinations. These events could cause large fluctuations in the balance sheet classification of current and non-current unrecognized tax benefits. The Company believes that in the next 12 months it is reasonably possible that certain income tax examinations will conclude or the statutes of limitation on certain income tax periods open to examination will expire, or both. Given the uncertainties described above, the Company can only determine an estimate of potential decreases in unrecognized tax benefits ranging from $ 1,250 to $ 10,487 . F-23 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (dollars in thousands, except per share amounts) Note 6 – Long-Term Debt Long-term debt consists of the following: December 31, 2023 December 31, 2022 Credit Facility $ - $ 42,000 Convertible senior notes, due 2025 95,102 465,344 Convertible senior notes, due 2030 750,000 - Deferred financing costs ( 26,914 ) ( 6,407 ) 818,188 500,937 Less current portion - - $ 818,188 $ 500,937 Credit Facility The Company maintains a credit agreement with a consortium of banks led by JPMorgan Chase Bank, N.A., as administrative agent, and the lenders (the "Credit Facility"). On May 8, 2023 , the Company entered into an Amendment and Restatement Agreement, which provides an aggregate commitment of $ 750,000 of revolving loans available until May 8, 2028 , replacing an agreement that was scheduled to mature on June 5, 2024 . The maturity date of the Credit Facility will accelerate if within ninety-one days prior to the maturity of the Company's convertible senior notes due 2025, the outstanding principal amount of such notes exceed a defined liquidity measure as set forth in the Credit Facility. The Credit Facility also provides for the ability of Vishay to request up to $ 300,000 of incremental facilities, subject to the satisfaction of certain conditions, which could take the form of additional revolving commitments, incremental “term loan A” or “term loan B” facilities, or incremental equivalent debt. U.S. Dollar borrowings under the Credit Facility bear interest at Secured Overnight Financing Rate ("SOFR") plus a credit spread and an interest margin. The Credit Facility also allows for borrowings in euro, British sterling, and Japanese yen, subject to a $ 250,000 limit. Borrowings in foreign currency bear interest at a local reference rate plus an interest margin. The applicable interest margin is based on the Company's total leverage ratio. Based on the Company's current total leverage ratio, borrowings bear interest at SOFR plus 1.60 % , including the applicable credit spread. The Company also pays a commitment fee, also based on its total leverage ratio, on undrawn amounts. The undrawn commitment fee, based on the Company's total current leverage ratio, is 0.25 % per annum. The Credit Facility requires the maintenance of financial covenant ratios. For compliance purposes, pursuant to the Credit Facility, the leverage ratio is computed on a net basis, reducing the measure of outstanding debt by up to $ 250,000 of unrestricted cash. The Company must maintain a net leverage ratio of at least 3.25 to 1.00. 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 solely for use in, or arising solely under the laws of, any country other than the United States, assets located solely outside of the United States and deposit and securities accounts), of the Company and certain significant subsidiaries located in the United States, and pledges of stock in certain significant domestic and foreign subsidiaries; and are guaranteed by certain significant subsidiaries. The Credit Facility limits or restricts the Company and its subsidiaries, from, among other things, incurring indebtedness, incurring liens on its respective assets, making investments and acquisitions (assuming the Company’s pro forma net leverage ratio is greater than 2.75 to 1.00), making asset sales, and paying cash dividends and making other restricted payments (assuming the Company's pro forma net leverage ratio is greater than 2.50 to 1.00), and requires the Company to comply with other covenants. The Credit Facility also contains customary events of default, including, but not limited to, failure to pay principal or interest, failure to pay or default under other material debt, material misrepresentation or breach of warranty, violation of certain covenants, a change of control, the commencement of bankruptcy proceedings, the insolvency of the Company or certain of its significant subsidiaries, and the rendering of a judgment in excess of $ 50,000 against the Company or its subsidiaries. Upon the occurrence of an event of default under the Credit Facility, the Company's obligations under the credit facility may be accelerated and the lending commitments under the credit facility may be terminated. At December 31, 2023 and 2022, there was $ 748,578 and $ 707,061 , respectively, available under the Credit Facility. Letters of credit totaling $ 1,422 and $ 939 were outstanding at December 31, 2023 and 2022, respectively. F-24 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (dollars in thousands, except per share amounts) Note 6 – Long-Term Debt (continued) Convertible Debt Instruments The following table summarizes some key facts and terms regarding the outstanding convertible senior notes as of December 31, 2023: Due 2025 Due 2030 Issuance date June 12, 2018 September 12, 2023 Maturity date June 15, 2025 September 15, 2030 Principal amount $ 95,102 $ 750,000 Cash coupon rate (per annum) 2.25 % 2.25 % Conversion rate effective December 12, 2023 (per $1 principal amount) 32.1268 33.1609 Effective conversion price effective December 12, 2023 (per share) $ 31.13 $ 30.16 130 % of the conversion price (per share) $ 40.47 $ 39.21 Convertible Senior Notes due 2030 In September 2023, the Company issued $ 750,000 aggregate principal amount of 2.25% convertible senior notes due 2030 (the “2030 Notes”) to qualified institutional buyers pursuant to an exemption from registration provided by Rule 144A under the Securities Act. The Company used the net proceeds from this offering to repurchase $ 370,242 principal amount of its outstanding 2.25% convertible senior notes due 2025 (the “2025 Notes”) (as further described below), to reduce the outstanding balance of its Credit Facility, to enter into capped call transactions (as further described below), and for other general corporate purposes. The 2030 Notes bear interest at a rate of 2.25% per year payable semi-annually in arrears on March 15 and September 15 of each year, beginning March 15, 2024. The 2030 Notes mature on September 15, 2030 , unless earlier repurchased or converted. The 2030 Notes are convertible into shares of Vishay common stock at an initial conversion rate of 33.1609 shares of common stock per $1 principal amount of the notes, subject to adjustment. This initial conversion price represents a premium of 20% to the closing price of Vishay's common stock on September 7, 2023, which was $ 25.13 per share. This represents an initial effective conversion price of approximately $ 30.16 per share. The conversion rate of the 2030 Notes is not adjusted for quarterly cash dividends equal to or less than $ 0.10 per share of common stock. Pursuant to the indenture governing the 2030 Notes, the Company is required to satisfy its conversion obligations by paying cash equal to the principal amount of notes and settle any additional value in cash and/or shares at its discretion. Vishay must provide additional shares upon conversion if there is a "fundamental change" in the business as defined in the indenture governing the notes. The Company may not redeem the 2030 Notes prior to September 20, 2027. The Company may redeem for cash all or part of the 2030 Notes, at its option, on or after September 20, 2027, if the sale price of Vishay’s common stock has been at least 130% of the conversion price for a specified period at a redemption price equal to 100% of the principal amount of the notes to be redeemed, plus accrued and unpaid interest. If the Company elects to redeem fewer than all of the outstanding 2030 Notes, at least $ 100,000 aggregate principal amount of 2030 Notes must be outstanding and not subject to redemption. Prior to March 15, 2030, the holders of the 2030 Notes may convert their notes only under the following conditions: (1) the sale price of Vishay common stock reaches 130 % of the applicable conversion price for a specified period during any fiscal quarter commencing after the fiscal quarter ending on December 31, 2023; (2) the trading price of the notes falls below 98 % of the product of the last reported sale price of Vishay’s common stock and the conversion rate for a specified period; (3) the Company calls any or all of the 2030 Notes for redemption; or (4) upon the occurrence of specified corporate transactions. Capped Call Transactions In September 2023, in connection with the pricing and initial purchasers’ exercise in full of their option to purchase additional 2030 Notes, the Company entered into separate base and additional privately negotiated capped call transactions with an affiliate of an initial purchaser and certain other financial institutions. The capped call will initially cover, subject to customary anti-dilution adjustments, the aggregate number of shares of the Company’s common stock that initially underlie the 2030 Notes. The Company used $ 94,200 of the net proceeds from the 2030 Notes to pay the cost of the capped call transactions. The cap price of the capped call will initially be $ 43.98 per share, which represents a premium of approximately 75% over the last reported sale price of the Company’s common stock on September 7, 2023, and is subject to certain adjustments under the terms of the capped call. The capped call transactions are separate transactions entered into by the Company with each of the capped call counterparties, are not part of the terms of the 2030 Notes, and do not affect any holder’s rights under the 2030 Notes. Holders of the 2030 Notes do not have any rights with respect to the capped call. The capped call is classified within stockholders’ equity on the consolidated balance sheet. F-25 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (dollars in thousands, except per share amounts) Note 6 – Long-Term Debt (continued) Convertible Senior Notes due 2025 The Company used $ 386,745 of the net proceeds from the offering of the 2030 Notes to repurchase $ 370,242 principal amount of its outstanding 2025 Notes. As a result, the Company recognized a loss on early extinguishment of the 2025 Notes of $ 18,874 , including the write-off of a portion of unamortized debt issuance costs. Prior to December 15, 2024, the holders of the convertible senior notes due 2025 may convert their notes only under the following circumstances: (1) the sale price of Vishay common stock reaches 130 % of the conversion price for a specified period; (2) the trading price of the notes falls below 98 % of the product of the sale price of Vishay's common stock and the conversion rate for a specified period; or (3) upon the occurrence of specified corporate transactions. The convertible senior notes due 2025 are not currently convertible. Upon conversion of the convertible senior notes due 2025, Vishay will satisfy its conversion obligations by paying $1 cash per $1 principal amount of converted notes and settle any additional amounts due in common stock. The quarterly cash dividend program of the Company results in adjustments to the conversion rate and effective conversion price for the convertible senior notes due 2025 effective as of the ex-dividend date of each cash dividend. The conversion rate and effective conversion price for the convertible senior notes due 2025 is adjusted for quarterly cash dividends to the extent such dividends exceed $ 0.085 per share of common stock. Other Borrowings Information The Credit Facility, of which no amount was drawn as of December 31, 2023, expires in 2028. The convertible senior notes mature in 2025 and 2030, respectively. At December 31, 2023 and 2022, the Company had committed and uncommitted credit lines with various foreign banks aggregating approximately $ 34,000 and $ 1,000 , respectively, with substantially no amounts borrowed. Interest paid was $ 17,242 , $ 13,739 , and $ 14,177 for the years ended December 31, 2023, 2022, and 2021, respectively. Deferred financing costs are recognized as non-cash interest expense. Non-cash interest expense was $ 3,735 , $ 3,272 , and $ 3,272 for the years ended December 31, 2023, 2022, and 2021, respectively. See Note 18 for further discussion on the fair value of the Company’s long-term debt. F-26 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (dollars in thousands, except per share amounts) Note 7 – Stockholders’ Equity The Company’s Class B common stock carries 10 votes per share while the common stock carries 1 vote per share. Class B shares are transferable only to certain permitted transferees while the common stock is freely transferable. Class B shares are convertible on a one-for-one basis at any time into shares of common stock. Transfers of Class B shares other than to permitted transferees result in the automatic 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 common stock if it grants such dividends or distributions in the same amount per share with respect to the other class of stock. Stock dividends or distributions on any class of stock are payable only in shares of stock of that class. Shares of either common stock or Class B common stock cannot be split, divided, or combined unless the other is also split, divided, or combined equally. Cash dividends were paid quarterly in 2023 and 2022. The Credit Facility also allows an unlimited amount of defined "Restricted Payments," which include cash dividends and share repurchases, provided the Company's pro forma net leverage ratio is equal to or less than 2.50 to 1.00. If the Company's pro forma net leverage ratio is greater than 2.50 to 1.00, the Credit Facility allows such payments up to $ 100,000 per annum (subject to a cap of $ 300,000 for the term of the facility, with up to $ 25,000 of any unused amount of the $ 100,000 per annum base available for use in the next succeeding calendar year). At December 31, 2023, the Company had reserved shares of common stock for future issuance as follows: Restricted stock units outstanding 1,717,000 Phantom stock units outstanding 120,000 2023 Long-Term Incentive Plan - available to grant 5,250,847 Convertible senior notes, due 2025 3,055,323 Convertible senior notes, due 2030 24,870,675 Conversion of Class B common stock 12,097,148 Total 47,110,993 In 2022, the Company's Board of Directors adopted a Stockholder Return Policy that will remain in effect until such time as the Board votes to amend or rescind the policy. The Stockholder Return Policy calls for the Company to return a prescribed amount of cash flows on an annual basis. The Company intends to return such amounts directly, in the form of dividends, or indirectly, in the form of stock repurchases. The following table summarizes activity pursuant to this policy: Years ended December 31, 2023 2022 Dividends paid to stockholders $ 55,626 $ 57,187 Stock repurchases 78,684 82,972 Total $ 134,310 $ 140,159 The repurchased shares are being held as treasury stock. The number of shares of common stock being held as treasury stock was 7,535,881 and 4,240,573 as of December 31, 2023 and 2022, respectively. F-27 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (dollars in thousands, except per share amounts) Note 8 – Details of Expenses The caption “Other” on the accompanying consolidated statements of operations consists of the following: Years ended December 31, 2023 2022 2021 Foreign exchange gain (loss) $ 677 $ 5,690 $ ( 2,692 ) Interest income 31,353 7,560 1,269 Other components of periodic pension expense ( 8,730 ) ( 11,090 ) ( 13,206 ) Investment income (expense) 1,347 ( 6,812 ) ( 1,036 ) Other 616 ( 200 ) 11 $ 25,263 $ ( 4,852 ) $ ( 15,654 ) Impact of the COVID-19 Pandemic The Company's operations were impacted by the "COVID-19" pandemic, particularly in 2020 and again in 2022 when operations in the People's Republic of China were impacted by government-mandated shut-downs. The Company incurred incremental costs separable from normal operations that are directly related to the pandemic containment efforts, primarily wages paid to manufacturing employees during government-mandated shut-downs, additional wages and hardship allowances for working during lockdown periods, additional costs of cleaning and disinfecting facilities, costs of additional safety equipment for employees, and temporary housing for employees due to travel restrictions, which were partially offset by government subsidies. Since 2021, certain costs directly attributable to the pandemic, such as additional costs of cleaning and disinfecting facility and costs of additional safety equipment for employees, are no longer incremental and are considered normal operating costs. The net impact of the costs and subsidies are reported as "Cost of products sold" of $ 6,661 and "Selling, general, and administrative expenses" of $ 546 based on employee function on the consolidated statement of operations for the year ended December 31, 2022. F-28 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (dollars in thousands, except per share amounts) Note 9 – Other Accrued Expenses Other accrued expenses consist of the following: December 31, 2023 2022 Sales returns and allowances $ 47,760 $ 46,979 Goods received, not yet invoiced 44,657 60,201 Accrued VAT taxes payable 56,218 55,010 Other 90,715 99,416 $ 239,350 $ 261,606 Sales returns and allowances accrual activity is shown below: Years Ended December 31, 2023 2022 2021 Beginning balance $ 46,979 $ 39,759 $ 39,629 Sales returns and allowances 101,696 102,640 89,832 Credits issued ( 101,324 ) ( 94,682 ) ( 88,708 ) Foreign currency 409 ( 738 ) ( 994 ) Ending balance $ 47,760 $ 46,979 $ 39,759 F-29 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 each component are as follows: Pension and other post- retirement actuarial items Currency translation adjustment Total Balance at January 1, 2021 $ ( 77,075 ) $ 90,634 $ 13,559 Other comprehensive income before reclassifications 12,592 ( 51,978 ) $ ( 39,386 ) Tax effect ( 2,509 ) - $ ( 2,509 ) Other comprehensive income before reclassifications, net of tax 10,083 ( 51,978 ) $ ( 41,895 ) Amounts reclassified out of AOCI 10,677 - $ 10,677 Tax effect ( 2,593 ) - $ ( 2,593 ) Amounts reclassified out of AOCI, net of tax 8,084 - $ 8,084 Net comprehensive income (loss) $ 18,167 $ ( 51,978 ) $ ( 33,811 ) Balance at December 31, 2021 $ ( 58,908 ) $ 38,656 $ ( 20,252 ) Other comprehensive income before reclassifications 60,949 ( 41,885 ) $ 19,064 Tax effect ( 15,783 ) - $ ( 15,783 ) Other comprehensive income before reclassifications, net of tax 45,166 ( 41,885 ) $ 3,281 Amounts reclassified out of AOCI 8,260 - $ 8,260 Tax effect ( 2,116 ) - $ ( 2,116 ) Amounts reclassified out of AOCI, net of tax 6,144 - $ 6,144 Net comprehensive income (loss) $ 51,310 $ ( 41,885 ) $ 9,425 Balance at December 31, 2022 $ ( 7,598 ) $ ( 3,229 ) $ ( 10,827 ) Other comprehensive income before reclassifications ( 10,338 ) 28,165 $ 17,827 Tax effect 2,462 - $ 2,462 Other comprehensive income before reclassifications, net of tax ( 7,876 ) 28,165 $ 20,289 Amounts reclassified out of AOCI 1,181 - $ 1,181 Tax effect ( 306 ) - $ ( 306 ) Amounts reclassified out of AOCI, net of tax 875 - $ 875 Net comprehensive income (loss) $ ( 7,001 ) $ 28,165 $ 21,164 Balance at December 31, 2023 $ ( 14,599 ) $ 24,936 $ 10,337 Other comprehensive income (loss) includes Vishay's proportionate share of other comprehensive income (loss) of nonconsolidated subsidiaries accounted for under the equity method. F-30 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (dollars in thousands, except per share amounts) Note 11 – Pensions and Other Postretirement Benefits The 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 the funded status on the balance sheet requires employers to recognize actuarial items (such as actuarial gains and losses, prior service costs, and transition obligations) as a component of other comprehensive income, net of tax. The following table summarizes amounts recorded on the accompanying consolidated balance sheets associated with these various retirement benefit plans: December 31, 2023 2022 Included in "Other assets": Non-U.S. pension plans $ 3,929 $ 4,715 Total included in other assets $ 3,929 $ 4,715 Included in "Payroll and related expenses": U.S. pension plans $ ( 1,474 ) $ ( 6,378 ) Non-U.S. pension plans ( 7,149 ) ( 6,827 ) U.S. other postretirement plans ( 510 ) ( 497 ) Non-U.S. other postretirement plans ( 390 ) ( 666 ) Total included in payroll and related expenses $ ( 9,523 ) $ ( 14,368 ) Accrued pension and other postretirement costs: U.S. pension plans $ ( 29,217 ) $ ( 30,843 ) Non-U.S. pension plans ( 144,276 ) ( 135,809 ) U.S. other postretirement plans ( 3,750 ) ( 3,831 ) Non-U.S. other postretirement plans ( 7,173 ) ( 6,049 ) Other retirement obligations ( 11,087 ) ( 10,560 ) Total accrued pension and other postretirement costs $ ( 195,503 ) $ ( 187,092 ) Accumulated other comprehensive loss: U.S. pension plans $ ( 522 ) $ 69 Non-U.S. pension plans 24,891 16,392 U.S. other postretirement plans ( 1,527 ) ( 2,031 ) Non-U.S. other postretirement plans 1,488 743 Total accumulated other comprehensive loss* $ 24,330 $ 15,173 * - Amounts included in accumulated other comprehensive loss are presented in this table pre-tax Defined Benefit Pension Plans U.S. Pension Plans The Company maintained several defined benefit pension plans which covered most full-time U.S. employees. These included pension plans 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 qualified pension plan would be limited by ERISA and the Internal Revenue Code. The Company’s principal qualified U.S. pension plan (the Vishay Retirement Plan) was frozen effective January 1, 2009 and terminated in 2016. The Company’s principal non-qualified U.S. pension plan (the Vishay Non-qualified Retirement Plan) was a contributory pension plan designed to provide similar defined benefits to covered U.S. employees whose benefits under the Vishay Retirement Plan were limited by the Internal Revenue Code. The Vishay Non-qualified Retirement Plan was similar in construction to the Vishay Retirement Plan, except that the plan is not qualified under the Internal Revenue Code. 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 claims under certain conditions and are not the property of employees. Therefore, they are accounted for as other noncurrent assets. Assets held in trust related to the non-qualified pension plan were $ 21,095 and $ 20,615 at December 31, 2023 and 2022, respectively. F-31 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (dollars in thousands, except per share amounts) Note 11 – Pensions and Other Postretirement Benefits (continued) In 2008, the Company adopted amendments to the Vishay Non-Qualified Retirement Plan such that effective January 1, 2009, the plan was frozen. Pursuant to these amendments, no new employees may participate in the plans, no further participant contributions were required or permitted, and no further benefits shall accrue after December 31, 2008. Benefits accumulated as of December 31, 2008 will be paid to employees upon or following retirement, and the Company will likely need to make additional cash contributions to the rabbi trust to fund this accumulated benefit obligation. The Company also maintains other pension plans which provide supplemental defined benefits primarily to former U.S. employees whose benefits under qualified pension plans were limited by the Internal Revenue Code. These non-qualified plans are all non-contributory plans, and are considered to be unfunded. In 2004, the Company entered into an employment agreement with Dr. Felix Zandman, its Executive Chairman and then-Chief Executive Officer. Pursuant to this agreement, the Company is providing an annual retirement benefit of approximately $ 614 to his surviving 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 are accounted for as other noncurrent assets. Assets held in trust related to this non-qualified pension plan were $ 445 and $ 1,023 at December 31, 2023 and 2022, respectively. Non-U.S. Pension Plans The 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. 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, 2023 December 31, 2022 U.S. Plans Non-U.S. Plans U.S. Plans Non-U.S. Plans Change in benefit obligation: Benefit obligation at beginning of year $ 37,221 $ 203,541 $ 45,613 $ 278,173 Service cost - 3,063 - 4,199 Interest cost 1,997 7,346 1,122 3,200 Plan amendments - ( 15 ) - 79 Actuarial (gains) losses ( 272 ) 8,835 ( 7,668 ) ( 45,102 ) Benefits paid ( 8,255 ) ( 17,160 ) ( 1,846 ) ( 16,777 ) Curtailments and settlements - ( 27 ) - - Currency translation - 5,200 - ( 20,231 ) Benefit obligation at end of year $ 30,691 $ 210,783 $ 37,221 $ 203,541 Change in plan assets: Fair value of plan assets at beginning of year $ - $ 65,620 $ - $ 75,920 Actual return on plan assets - 1,976 - 790 Company contributions 8,255 12,161 1,846 13,212 Benefits paid ( 8,255 ) ( 17,160 ) ( 1,846 ) ( 16,777 ) Currency translation - 690 - ( 7,525 ) Fair value of plan assets at end of year $ - $ 63,287 $ - $ 65,620 Funded status at end of year $ ( 30,691 ) $ ( 147,496 ) $ ( 37,221 ) $ ( 137,921 ) F-32 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (dollars in thousands, except per share amounts) Note 11 – Pensions and Other Postretirement Benefits (continued) The plan assets are stated at fair value. See Note 18 for further discussion of the valuation of the plan assets. Amounts recognized in the accompanying consolidated balance sheets consist of the following: December 31, 2023 December 31, 2022 U.S. Plans Non-U.S. Plans U.S. Plans Non-U.S. Plans Other assets $ - $ 3,929 $ - $ 4,715 Accrued benefit liability - current ( 1,474 ) ( 7,149 ) ( 6,378 ) ( 6,827 ) Accrued benefit liability - non-current ( 29,217 ) ( 144,276 ) ( 30,843 ) ( 135,809 ) Accumulated other comprehensive loss ( 522 ) 24,891 69 16,392 $ ( 31,213 ) $ ( 122,605 ) $ ( 37,152 ) $ ( 121,529 ) Actuarial items consist of the following: December 31, 2023 December 31, 2022 U.S. Plans Non-U.S. Plans U.S. Plans Non-U.S. Plans Unrecognized net actuarial (gain) loss $ ( 588 ) $ 24,094 $ ( 140 ) $ 15,628 Unamortized prior service cost 66 797 209 764 $ ( 522 ) $ 24,891 $ 69 $ 16,392 The following table sets forth additional information regarding the projected and accumulated benefit obligations: December 31, 2023 December 31, 2022 U.S. Plans Non-U.S. Plans U.S. Plans Non-U.S. Plans Accumulated benefit obligation, all plans $ 30,691 $ 194,361 $ 37,221 $ 176,056 Plans for which the accumulated benefit obligation exceeds plan assets: Projected benefit obligation $ 30,691 $ 146,898 $ 37,221 $ 181,207 Accumulated benefit obligation 30,691 144,213 37,221 159,433 Fair value of plan assets - 3,032 - 38,854 The following table sets forth the components of net periodic pension cost: Years ended December 31, 2023 2022 2021 U.S. Plans Non-U.S. Plans U.S. Plans Non-U.S. Plans U.S. Plans Non-U.S. Plans Service cost $ - $ 3,063 $ - $ 4,199 $ - $ 4,693 Interest cost 1,997 7,346 1,122 3,200 1,016 2,968 Expected return on plan assets - ( 2,270 ) - ( 1,725 ) - ( 1,660 ) Amortization of actuarial losses 175 345 1,523 4,760 2,032 7,444 Amortization of prior service cost 144 195 144 216 144 189 Curtailment and settlement losses - 546 - 1,190 - 632 Net periodic pension cost $ 2,316 $ 9,225 $ 2,789 $ 11,840 $ 3,192 $ 14,266 F-33 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 December 31, 2023, 2022, and 2021. The estimated actuarial items for the defined benefit pensions plans that will be amortized from accumulated other comprehensive loss into net periodic pension cost during 2024 are not material. The following weighted average assumptions were used to determine benefit obligations at December 31 of the respective years: 2023 2022 U.S. Plans Non-U.S. Plans U.S. Plans Non-U.S. Plans Discount rate 5.25 % 3.36 % 5.50 % 3.57 % Rate of compensation increase 0.00 % 3.12 % 0.00 % 2.60 % The following weighted average assumptions were used to determine the net periodic pension costs: Years ended December 31, 2023 2022 U.S. Plans Non-U.S. Plans U.S. Plans Non-U.S. Plans Discount rate 5.50 % 3.57 % 2.50 % 1.19 % Rate of compensation increase 0.00 % 2.60 % 0.00 % 2.07 % Expected return on plan assets 0.00 % 4.11 % 0.00 % 2.96 % The plans’ expected return on assets is based on management’s expectations of long-term average rates of return to be achieved by the underlying investment portfolios. In establishing this assumption, management considers historical and expected returns for the asset classes in which the plans are invested, advice from pension consultants and investment advisors, and current economic and capital market conditions. The investment mix between equity securities and fixed income securities is based upon achieving a desired return, balancing higher return, more volatile equity securities, and lower return, less volatile fixed income securities and is adjusted for the expected duration of the obligation and the funded status of the plan. Investment allocations are made across a range of securities, maturities and credit quality. The Company’s non-U.S. defined benefit plan investments are based on local laws and customs. Most plans invest in cash and local government fixed income securities, although plans 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 18 for 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 2024 $ 3,347 $ 14,897 2025 3,301 15,450 2026 1,941 17,775 2027 8,306 14,830 2028 3,198 14,744 2029-2033 9,415 74,939 The Company’s anticipated 2024 contributions for defined benefit pension plans will approximate the expected benefit payments disclosed above. F-34 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (dollars in thousands, except per share amounts) Note 11 – Pensions and Other Postretirement Benefits (continued) Other Postretirement Benefits In the U.S., the Company maintains unfunded non-pension postretirement plans, including medical benefits for certain executives and their surviving spouses, which are funded as costs are incurred. The Company also maintains two unfunded non-pension postretirement 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, 2023 December 31, 2022 U.S. Plans Non-U.S. Plans U.S. Plans Non-U.S. Plans Change in benefit obligation: Benefit obligation at beginning of year $ 4,328 $ 6,715 $ 7,611 $ 7,782 Service cost 21 221 39 237 Interest cost 225 251 178 55 Actuarial (gains) losses 183 801 ( 2,525 ) ( 749 ) Benefits paid ( 497 ) ( 681 ) ( 975 ) ( 147 ) Currency translation - 256 - ( 463 ) Benefit obligation at end of year $ 4,260 $ 7,563 $ 4,328 $ 6,715 Fair value of plan assets at end of year $ - $ - $ - $ - Funded status at end of year $ ( 4,260 ) $ ( 7,563 ) $ ( 4,328 ) $ ( 6,715 ) Amounts recognized in the accompanying consolidated balance sheets consist of the following: December 31, 2023 December 31, 2022 U.S. Plans Non-U.S. Plans U.S. Plans Non-U.S. Plans Accrued benefit liability - current $ ( 510 ) $ ( 390 ) $ ( 497 ) $ ( 666 ) Accrued benefit liability - non-current ( 3,750 ) ( 7,173 ) ( 3,831 ) ( 6,049 ) Accumulated other comprehensive (income) loss ( 1,527 ) 1,488 ( 2,031 ) 743 $ ( 5,787 ) $ ( 6,075 ) $ ( 6,359 ) $ ( 5,972 ) F-35 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, 2023 December 31, 2022 U.S. Plans Non-U.S. Plans U.S. Plans Non-U.S. Plans Unrecognized net actuarial loss (gain) $ ( 1,527 ) $ 1,488 $ ( 2,031 ) $ 743 $ ( 1,527 ) $ 1,488 $ ( 2,031 ) $ 743 The following table sets forth the components of net periodic benefit cost: Years ended December 31, 2023 2022 2021 U.S. Plans Non-U.S. Plans U.S. Plans Non-U.S. Plans U.S. Plans Non-U.S. Plans Service cost $ 21 $ 221 $ 39 $ 237 $ 102 $ 278 Interest cost 225 251 178 55 163 42 Amortization of actuarial (gains) losses ( 321 ) 8 342 85 53 116 Curtailment and settlement losses - 89 - - - 67 Net periodic benefit cost (benefit) $ ( 75 ) $ 569 $ 559 $ 377 $ 318 $ 503 The estimated actuarial items for the other postretirement benefit plans that will be amortized from accumulated other comprehensive loss into net periodic benefit cost during 2024 are not material. The following weighted average assumptions were used to determine benefit obligations at December 31 of the respective years: 2023 2022 U.S. Plans Non-U.S. Plans U.S. Plans Non-U.S. Plans Discount rate 5.25 % 3.40 % 5.50 % 3.86 % Rate of compensation increase 0.00 % 4.00 % 0.00 % 4.19 % The following weighted average assumptions were used to determine the net periodic benefit costs: Years ended December 31, 2023 2022 U.S. Plans Non-U.S. Plans U.S. Plans Non-U.S. Plans Discount rate 5.50 % 3.86 % 2.50 % 0.80 % Rate of compensation increase 0.00 % 4.19 % 0.00 % 2.88 % The impact of a one-percentage-point change in assumed health care cost trend rates on the net periodic benefit cost and postretirement benefit obligation is not material. F-36 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 2024 $ 510 $ 390 2025 499 621 2026 467 205 2027 452 1,525 2028 416 785 2029-2033 1,594 4,897 As the plans are unfunded, the Company’s anticipated contributions for 2024 are equal to its estimated benefits payments. Other Retirement Obligations The Company participates in various other defined contribution and government-mandated retirement plans based on local law or custom. The Company periodically makes required contributions for certain of these plans, whereas other plans are unfunded retirement bonus plans which will be paid at the employee's retirement date. At December 31, 2023 and 2022, the accompanying consolidated balance sheets include $ 11,087 and $ 10,560 , respectively, within accrued pension and other postretirement costs related to these plans. The Company’s U.S. employees are eligible to participate in a 401(k) savings plan, which provides for Company matching contributions. The Company’s matching expense for the plans was $ 7,641 , $ 7,083 , and $ 6,557 for the years ended December 31, 2023, 2022, and 2021, respectively. No material amounts are included in the accompanying consolidated balance sheets at December 31, 2023 and 2022 related to unfunded 401(k) contributions. Certain key employees participate in a deferred compensation plan. During the years ended December 31, 2023, 2022, and 2021, these employees could defer a portion of their compensation until retirement, or elect shorter deferral periods. The Company maintains a liability 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 under certain conditions and are not the property of employees. Therefore, they are accounted for as other noncurrent assets. Assets held in trust related to the deferred compensation plan at December 31, 2023 and 2022 were approximately $ 28,838 and $ 28,535 , respectively. F-37 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (dollars in thousands, except per share amounts) Note 12 – Stock-Based Compensation 2023 Long-Term Incentive Plan The Company implemented the Vishay Intertechnology, Inc. 2023 Long-Term Incentive Plan (the "2023 Plan") after receiving stockholder approval at its 2023 Annual Meeting of Stockholders on May 23, 2023. The 2023 Plan allows the Company to grant up to 6,000,000 shares (subject to certain adjustments described in the 2023 Plan) of stock options, stock appreciation rights, restricted stock, restricted stock units, other stock-based awards, phantom stock units, and other cash-based awards to employees, directors, consultants, and other service providers of the Company and its affiliates. Such instruments are available for grant until March 24, 2033 . The Company has granted approximately 761,000 time-vested restricted stock units to employees pursuant to the 2023 Plan. At December 31, 2023, the Company has reserved 5,250,847 shares of common stock for future grants of equity awards pursuant to the 2023 Plan. 2007 Stock Incentive Program Under the Company's 2007 Stock Incentive Program (the "2007 Program"), as amended and restated, certain executive officers and board members of the Company were granted restricted stock units. No further awards will be granted pursuant to the 2007 Program. Pursuant to the terms of the 2023 Plan, any shares of common stock that are subject to outstanding awards granted pursuant to the 2007 Program that subsequently cease to be subject to such awards as a result of the termination, expiration, cancellation, or forfeiture of such awards and any shares of common stock withheld in settlement of tax withholding obligations associated with outstanding awards granted pursuant to the 2007 Program may become available for issuance under the 2023 Plan. A total of 1,294,546 shares of common stock were subject to awards granted pursuant to the 2007 Program as of May 23, 2023. All RSUs granted pursuant to the 2007 Program and the 2023 Plan contain service vesting conditions. Certain RSUs also contain performance or market vesting conditions. The Company recognizes compensation cost for RSUs that are expected to vest and records cumulative adjustments in the period that the expectation changes. The following table summarizes share-based compensation expense recognized: Years ended December 31, 2023 2022 2021 Restricted stock units $ 16,425 $ 6,323 $ 6,396 Phantom stock units 107 222 209 Total $ 16,532 $ 6,545 $ 6,605 The following table summarizes unrecognized compensation cost and the weighted average remaining amortization periods at December 31, 2023 (amortization periods in years) : Unrecognized Compensation Cost Weighted Average Remaining Amortization Periods Restricted stock units $ 15,174 1.6 Phantom stock units - 0.0 Total $ 15,174 The Company currently expects all performance-based RSUs to vest and all of the associated unrecognized compensation cost for performance-based RSUs presented in the table above to be recognized. F-38 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (dollars in thousands, except per share amounts) Note 12 – Stock-Based Compensation (continued) Restricted Stock Units Each RSU entitles the recipient to receive a share of common stock when the RSU vests. RSU activity is presented below (number of RSUs in thousands) : Years ended December 31, 2023 2022 2021 Number of RSUs Weighted Average Grant-date Fair Value Number of RSUs Weighted Average Grant-date Fair Value Number of RSUs Weighted Average Grant-date Fair Value Outstanding: Beginning of year 894 $ 19.73 877 $ 20.08 793 $ 18.90 Granted* 1,180 24.34 336 19.13 319 22.07 Vested** ( 342 ) 18.86 ( 306 ) 20.04 ( 235 ) 18.79 Cancelled or forfeited ( 15 ) 24.83 ( 13 ) 20.50 - - End of year 1,717 $ 23.03 894 $ 19.73 877 $ 20.08 Expected to vest 1,702 894 877 * Employees in certain countries are granted equity-linked awards that will be settled in cash and are accounted for as liability awards. The liability awards are not material. The number of RSUs granted excludes these awards. ** The number of RSUs vested includes shares that the Company withheld on behalf of employees to satisfy the statutory tax withholding requirements. The number of performance-based RSUs that are scheduled to vest increases ratably based on the achievement of defined performance and market criteria between the established target and maximum levels. RSUs with performance-based and market-based vesting criteria are expected to vest as follows (number of RSUs in thousands) : Vesting Date Expected to Vest Not Expected to Vest Total January 1, 2024*** 165 - 165 January 1, 2025 168 - 168 January 1, 2026 157 15 172 *** The performance vesting criteria for the performance-based RSUs with a vesting date of January 1, 2024 were achieved. In the event of (i) any termination (other than for cause) after attaining retirement age (as defined in the respective executive's employment arrangement), the executive's outstanding RSUs shall immediately vest and the outstanding performance-based RSUs shall vest on their normal vesting date to the extent applicable performance criteria are realized; (ii) a change of control of Vishay in which the executive's RSUs and performance-based RSUs are not assumed or continued, all of such executive’s outstanding RSUs and performance-based RSUs shall immediately vest; (iii) a change of control of Vishay in which the executive's RSUs and performance-based RSUs are assumed or continued, upon termination without cause or good reason the executive's outstanding RSUs and performance-based RSUs. In the event of voluntary termination by the executive prior to attaining retirement age or termination for cause, the executive’s outstanding RSUs and performance-based RSUs will be forfeited. F-39 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (dollars in thousands, except per share amounts) Note 12 – Stock-Based Compensation (continued) Phantom Stock Units Each phantom stock unit entitles the recipient to receive a share of common stock at the individual's termination of employment or any other future date specified in the applicable employment agreement. Phantom stock units participate in dividend distribution on the same basis as the Company's common stock and Class B common stock. Dividend equivalents are issued 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 (number of phantom stock units in thousands) : Years ended December 31, 2023 2022 2021 Number of Phantom Stock Units Grant-date Fair Value per Unit Number of Phantom Stock Units Grant-date Fair Value per Unit Number of Phantom Stock Units Grant-date Fair Value per Unit Outstanding: Beginning of year 226 212 198 Granted 5 $ 21.48 10 $ 22.20 10 $ 20.89 Dividend equivalents issued 2 4 4 Redeemed for common stock* ( 113 ) - - End of year 120 226 212 * The number of phantom stock units redeemed for common stock includes shares that the Company withheld on behalf of employees to satisfy the statutory tax withholding requirements. F-40 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (dollars in thousands, except per share amounts) Note 13 – Commitments and Contingencies Environmental Matters The Company is subject to various federal, state, local, and foreign laws and regulations governing environmental matters, including the use, discharge, and disposal of hazardous materials. The Company’s manufacturing facilities are believed to be in substantial compliance with current laws and regulations. Complying with current laws and regulations has not had a material adverse effect on the Company’s financial condition. The Company has engaged environmental consultants and attorneys to assist management in evaluating potential liabilities related to environmental matters. Management assesses the input from these consultants along with other information known to the Company in its 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 the Company’s share of remediation costs, information known to the Company concerning the size of the hazardous waste sites, their years of operation, and the number of past users and their financial viability. As of December 31, 2023, the Company has accrued environmental liabilities of $ 12,430 , of which $ 2,936 is included in other accrued liabilities on the accompanying consolidated balance sheet , and $ 9,494 is included in other noncurrent liabilities on the accompanying consolidated balance sheet. While the ultimate outcome of these matters cannot be determined, management does not believe that the final disposition of these matters will have a material adverse effect on the Company’s consolidated financial position, results of operations, or cash flows. The Company’s present and past facilities have been in operation for many years. These facilities have used substances and have generated and disposed of wastes which are or might be considered hazardous. Therefore, it is possible that additional environmental issues may arise in the future, which the Company cannot now predict. Litigation The Company is a party to various claims and lawsuits arising in the normal course of business. The Company is of the opinion that these litigations or claims will not have a material negative effect on its consolidated financial position, results of operations, or cash flows. Long-Term Purchase Agreements The Company maintains long-term purchase agreements with subcontractors, suppliers, and other business partners to ensure access to external capacity and supply. The Company has minimum purchase commitments pursuant to certain of its long-term arrangements with its subcontractors and other suppliers and business partners of $ 57,824 and $ 29,109 for the years 2024 through 2025, respectively. Certain minimum purchase commitments are based on an 18-month rolling forecast and, accordingly, the 2025 minimum purchase commitments will likely increase. The Company has the option to purchase amounts in addition to the minimum commitment and, accordingly, actual purchases may be different than the amounts disclosed above. The Company exceeded its minimum purchase commitments in 2023. Product Quality Claims The Company is a party to various product quality claims in the normal course of business. See Note 1 for further information on the Company's warranty obligations. Executive Employment Agreements The Company has employment agreements with certain of its senior executives. These employment agreements provide incremental compensation in the event of termination. The Company does not provide any severance or other benefits specifically upon a change in control. F-41 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (dollars in thousands, except per share amounts) Note 14 – Current Vulnerability Due to Certain Concentrations Market Concentrations No customer represented greater than 10% of consolidated net revenue in 2023 or 2022. A material portion of the Company's revenues are derived from the worldwide industrial, automotive, telecommunications, and computing markets. These markets have historically experienced wide variations in demand for end products. If demand for these end products should decrease, the producers thereof could reduce their purchases of the Company's products, which could have an adverse effect on the Company's results of operations and financial position. Certain subsidiaries and product lines have customers which comprise greater than 10% of the subsidiary's or product line's net revenues. The loss of one of these customers could have a material effect on the results of operations of the subsidiary or product line and financial position of the subsidiary, which could result in an impairment charge which could be material to the Company's consolidated financial statements. Credit Risk Concentrations Financial instruments with potential credit risk consist principally of cash and cash equivalents, short-term investments, accounts receivable, and notes receivable. Concentrations of credit risk with respect to receivables are generally limited due to the Company’s large number of customers and their dispersion across many countries and industries. As of December 31, 2023, one customer comprised 12.4 % of the Company's accounts receivable balance. As of December 31, 2022, one customer comprised 10.2 % of the Company's accounts receivable balance. The Company continually monitors the credit risks associated with its accounts receivable and adjusts the allowance for uncollectible accounts accordingly. The credit risk exposure associated with the accounts 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 Company is exposed to credit risk related to the potential inability to access liquidity in financial institutions where its cash and cash equivalents and short-term investments are concentrated. As of December 31, 2023, the following financial institutions held over 10% of the Company’s combined cash and cash equivalents and short-term investments balance: JPMorgan* 16.2 % Santander* 16.2 % TD Bank* 15.0 % MUFG Bank Ltd.* 10.8 % Bank of America* 10.1 % * Participant in Credit Facility Sources of Supplies The production and sale of the Company’s products is reliant on a complex global interconnected supply chain of vendors, manufacturing facilities, third-party foundries and subcontractors, shipping partners, distributors, and end market customers. Disruption in one part of the supply chain could cause disruption in all other parts of the supply chain. Global shipping impacts several parts of the supply chain and the disruption experienced in recent years has, at times, negatively impacted the Company’s ability to manufacture products and to deliver them to customers. Although most materials incorporated into the Company's products are available from a number of sources, certain materials, including plastics and metals, are produced in only a limited number of regions around the world or are available from only a limited number of suppliers. Suppliers periodically extend lead times, face capacity constraints, limit supplies, increase prices, experience quality issues, or encounter cybersecurity or other issues that can interrupt or increase the cost of our supply. The unavailability or reduced availability of these materials could require the Company to temporarily cease or reduce production or incur additional costs. Customer requirements and certain laws pertaining to the responsible sourcing of materials, including tantalum, tungsten, tin, gold, and cobalt, all of which are used in the Company’s products, are increasing and becoming more stringent. Responsible sourcing efforts may result in increased prices and decreased availability of these materials. Many of the metals used in the manufacture of the Company’s products, including gold, copper, and palladium, are traded on active markets and can be subject to significant price volatility. To ensure adequate supply and to provide cost certainty, the Company’s policy is to enter into short-term commitments to purchase defined portions of annual consumption of the raw materials utilized if market prices decline below budget. If after entering into these commitments, the market prices for these raw materials decline, losses are recognized on these adverse purchase commitments. F-42 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (dollars in thousands, except per share amounts) Note 14 – Current Vulnerability Due to Certain Concentrations (continued) The Company's production can be disrupted by the unavailability of resources, such as water, energy, and gases. The unavailability or reduced availability of these resources could require the Company to reduce production or incur additional costs. The Company uses third-party foundries and subcontractors for certain of its manufacturing activities, primarily wafer fabrication and the assembly and testing of finished goods. Establishing third-party contract manufacturer relationships can be time consuming and costly, and the number of qualified providers is limited. The Company's agreements with these manufacturers typically require it to commit to purchase services based on forecasted product needs, which may be inaccurate, and, in some cases, require the recognition of losses on these adverse purchase commitments. The Company's agreements may limit its ability to increase production, particularly during periods of growing demand for our products. Geographic Concentration The Company has operations outside the United States, and approximately 74 % of revenues earned during 2023 were derived from sales to customers outside the United States. Additionally, as of December 31, 2023, $ 660,258 of the Company’s cash and cash equivalents and short-term investments were held by subsidiaries outside of the United States. Some of the Company’s products are produced 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, and labor unrest. These conditions could have an adverse impact on the Company’s ability to operate in these regions and, depending on the extent and severity of these conditions, could materially and adversely affect the Company’s overall financial condition, operating results, and ability to access its liquidity when needed. As of December 31, 2023 the Company’s cash and cash equivalents and short-term investments were concentrated in the following countries: United States 50.2 % People's Republic of China 10.7 % Israel 10.6 % The Republic of China (Taiwan) 9.2 % Germany 6.8 % Singapore 6.3 % Other Asia 3.8 % Other Europe 1.2 % Other 1.2 % Certain of the Company's non-U.S. subsidiaries have cash and cash equivalents and short-term investments deposited in U.S. financial institutions. Vishay has been in operation in Israel for 53 years . The Company has never experienced any material interruption in its operations attributable to these factors, in spite of several Middle East crises, including wars. F-43 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (dollars in thousands, except per share amounts) Note 15 – Segment and Geographic Data Vishay is a global manufacturer and supplier of electronic components. Vishay operates, and its chief operating decision maker makes strategic and operating decisions with regards to assessing performance and allocating resources based on, six reporting segments: MOSFETs, Diodes, Optoelectronic Components, Resistors, Inductors, and Capacitors. These segments represent groupings of product 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 electrostatic discharge damage; or provide electromagnetic interference filtering. ● Optoelectronic components emit light, detect light, or do both. ● Resistors are basic components used in all forms of electronic circuitry to adjust and regulate levels of voltage and current. ● Inductors use an internal magnetic field to change alternating current phase and resist 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. An immaterial portion of revenues are from royalties. The Company’s chief operating decision maker uses operating income, exclusive of certain items ("segment operating income") to make decisions, allocate resources, and assess performance, and the Company thus considers segment operating income to be its measure of segment profit or loss. Only dedicated, direct selling, general, and administrative expenses of the segments are included in the calculation of segment operating income. The Company's calculation of segment operating income excludes selling, general, and administrative costs of its global operations, sales and marketing, information systems, finance, and administration groups, as well as restructuring and severance costs, the direct impact of the COVID-19 pandemic, and other items affecting comparability. Management believes that evaluating segment performance excluding such items is meaningful because it provides insight with respect to intrinsic operating results of the Company. These items represent reconciling items between segment operating income and consolidated operating income. Business segment assets are the owned or allocated assets used by each business. F-44 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 Optoelectronic Components Resistors Inductors Capacitors Corporate / Other Total Year ended December 31, 2023: Net revenues $ 778,754 $ 690,540 $ 243,146 $ 843,472 $ 347,392 $ 498,741 $ - $ 3,402,045 Segment Operating Income 195,793 153,462 42,963 209,425 99,684 104,985 - $ 806,312 Depreciation expense 35,965 44,904 16,496 39,781 14,963 14,269 8,079 $ 174,457 Capital expenditures 132,543 62,185 23,228 67,085 10,767 21,914 11,688 $ 329,410 Total Assets as of December 31, 2023 : $ 702,299 $ 852,703 $ 352,984 $ 946,585 $ 365,111 $ 459,653 $ 560,588 $ 4,239,923 Year ended December 31, 2022: Net revenues $ 762,260 $ 765,220 $ 296,384 $ 832,806 $ 331,086 $ 509,645 $ - $ 3,497,401 Segment Operating Income 228,692 176,422 85,456 235,259 93,453 104,810 ( 6,661 ) $ 917,431 Depreciation expense 30,551 40,014 14,065 34,903 14,927 14,286 7,118 $ 155,864 Capital expenditures 90,297 69,126 27,776 76,702 35,102 15,214 11,091 $ 325,308 Total Assets as of December 31, 2022 : $ 672,048 $ 814,017 $ 385,388 $ 861,870 $ 322,893 $ 496,924 $ 312,513 $ 3,865,653 Year ended December 31, 2021: Net revenues $ 667,998 $ 709,416 $ 302,714 $ 752,554 $ 335,638 $ 472,167 $ - $ 3,240,487 Segment Operating Income 148,652 145,814 82,378 190,953 97,482 85,342 - $ 750,621 Depreciation expense 30,257 40,406 14,585 34,344 14,448 17,129 8,078 $ 159,247 Capital expenditures 44,227 45,772 25,068 57,729 24,377 13,099 8,100 $ 218,372 Total Assets as of December 31, 2021 : $ 503,937 $ 815,751 $ 377,815 $ 783,390 $ 355,353 $ 496,129 $ 210,882 $ 3,543,257 ________________ Years ended December 31, 2023 2022 2021 Reconciliation: Segment Operating Income $ 806,312 $ 917,431 $ 750,621 Impact of COVID-19 Pandemic on Selling, General, and Administrative Expenses - ( 546 ) - Unallocated Selling, General, and Administrative Expenses ( 320,168 ) ( 301,399 ) ( 282,819 ) Consolidated Operating Income (Loss) $ 486,144 $ 615,486 $ 467,802 Unallocated Other Income (Expense) ( 18,742 ) ( 21,981 ) ( 33,192 ) Consolidated Income Before Taxes $ 467,402 $ 593,505 $ 434,610 The Company has a broad line of products that it sells to OEMs, EMS companies, and independent distributors. The distribution of sales by customer type is shown below: Years Ended December 31, 2023 2022 2021 Distributors $ 1,798,291 $ 2,019,842 $ 1,902,499 OEMs 1,378,065 1,229,114 1,138,569 EMS companies 225,689 248,445 199,419 $ 3,402,045 $ 3,497,401 $ 3,240,487 F-45 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (dollars in thousands, except per share amounts) Note 15 – Segment and Geographic Data (continued) Net revenues were attributable to customers in the following regions: Years Ended December 31, 2023 2022 2021 Asia $ 1,255,563 $ 1,347,893 $ 1,392,267 Europe 1,255,652 1,146,898 1,072,025 Americas 890,830 1,002,610 776,195 $ 3,402,045 $ 3,497,401 $ 3,240,487 The Company generates substantially all of its revenue from product sales to end customers in the industrial, automotive, military and aerospace, medical, power supplies, telecommunications, consumer products, and computing end markets. Sales by end market are presented below: Years Ended December 31, 2023 2022 2021 Industrial $ 1,216,078 $ 1,377,043 $ 1,269,150 Automotive 1,202,923 1,067,499 994,039 Military and Aerospace 271,871 215,078 170,484 Medical 152,611 133,808 130,126 Other* 558,562 703,973 676,688 $ 3,402,045 $ 3,497,401 $ 3,240,487 *Power supplies, telecommunications, consumer products, and computing The following table summarizes net revenues based on revenues generated by subsidiaries located within the identified geographic area: Years ended December 31, 2023 2022 2021 United States $ 879,734 $ 974,503 $ 750,862 Germany 1,076,812 1,005,796 976,907 Other Europe 151,160 142,454 134,773 Israel 29,560 25,844 20,362 Asia 1,264,779 1,348,804 1,357,583 $ 3,402,045 $ 3,497,401 $ 3,240,487 The following table summarizes property and equipment based on physical location: December 31, 2023 2022 United States $ 162,428 $ 144,112 Germany 305,504 229,449 Other Europe 148,646 118,672 Israel 98,800 87,174 People's Republic of China 250,209 250,669 Republic of China (Taiwan) 207,515 192,456 Other Asia 108,055 98,332 Other 13,489 9,595 $ 1,294,646 $ 1,130,459 F-46 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (dollars in thousands, except per share amounts) Note 16 – Earnings Per Share Basic 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 the potentially dilutive effect of restricted stock units (see Note 12), convertible debt instruments (see Note 6), and other potentially dilutive securities. The following table sets forth the computation of basic and diluted earnings per share attributable to Vishay stockholders (shares in thousands) : Years ended December 31, 2023 2022 2021 Numerator: Net earnings attributable to Vishay stockholders $ 323,820 $ 428,810 $ 297,970 Denominator: Denominator for basic earnings per share: Weighted average shares 139,318 143,176 144,796 Outstanding phantom stock units 129 223 209 Adjusted weighted average shares - basic 139,447 143,399 145,005 Effect of dilutive securities: Restricted stock units 799 516 488 Convertible debt instruments - - 2 Dilutive potential common shares 799 516 490 Denominator for diluted earnings per share: Adjusted weighted average shares - diluted 140,246 143,915 145,495 Basic earnings per share attributable to Vishay stockholders $ 2.32 $ 2.99 $ 2.05 Diluted earnings per share attributable to Vishay stockholders $ 2.31 $ 2.98 $ 2.05 Diluted earnings per share for the years presented do not reflect the following weighted average potential common shares, as the effect would be antidilutive (in thousands) : Years ended December 31, 2023 2022 2021 Restricted stock units 82 251 279 If the average market price of Vishay common stock is less than the effective conversion prices of the convertible senior notes due 2025 and due 2030, respectively, no shares are included in the diluted earnings per share computation for the convertible senior notes due 2025 and due 2030. Upon Vishay exercising its existing right to legally amend the indenture governing the convertible senior notes due 2025, Vishay will satisfy its conversion obligations by paying $1 cash per $1 principal amount of converted notes and settle any additional amounts due in common stock. Pursuant to the indenture governing the convertible senior notes due 2030, Vishay will satisfy its conversion obligations by paying $1 cash per $1 principal amount of converted notes and settle any additional amounts due in cash and/or common stock. Accordingly, the convertible senior notes due 2025 and due 2030 are not anti-dilutive when the average market price of Vishay common stock is less than the respective effective conversion prices of the convertible senior notes due 2025 and due 2030. In connection with the issuance of the convertible senior notes due 2030, the Company entered into capped call transactions (see Note 6), which were not included in the calculation of diluted earnings per share as their effect would have been anti-dilutive. The capped calls are intended to reduce the potential dilution to the Company's common stock in the event that at the time of conversion of the convertible senior notes due 2030 the Company's common stock price exceeds the conversion price of the convertible senior notes due 2030. F-47 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (dollars in thousands, except per share amounts) Note 17 – Additional Cash Flow Information Changes in operating assets and liabilities, net of effects of businesses acquired, consist of the following : Years ended December 31, 2023 2022 2021 Accounts receivable $ ( 3,717 ) $ ( 26,696 ) $ ( 67,707 ) Inventories ( 58,758 ) ( 119,595 ) ( 121,492 ) Prepaid expenses and other current assets ( 42,005 ) ( 11,380 ) ( 35,377 ) Accounts payable 743 ( 61,665 ) 61,481 Other current liabilities ( 58,120 ) 77,223 79,683 Net change in operating assets and liabilities $ ( 161,857 ) $ ( 142,113 ) $ ( 83,412 ) F-48 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (dollars in thousands, except per share amounts) Note 18 – Fair Value Measurements The following table provides the financial assets and liabilities carried at fair value measured on a recurring basis: Total Fair Value Level 1 Level 2 Level 3 December 31, 2023 Assets: Assets held in rabbi trusts $ 50,378 $ 24,343 $ 26,035 $ - Available for sale securities $ 4,115 4,115 - - Non - U.S. Defined Benefit Pension Plan Assets: Equity securities $ 3,925 3,925 - - Fixed income securities $ 21,232 21,232 - - Cash $ 38,130 38,130 - - $ 117,780 $ 91,745 $ 26,035 $ - Liability: MaxPower acquisition contingent consideration $ 938 - - 938 December 31, 2022 Assets: Assets held in rabbi trusts $ 50,173 $ 27,168 $ 23,005 $ - Available for sale securities $ 3,677 3,677 - - Precious metals $ 1,252 1,252 - - Non - U.S. Defined Benefit Pension Plan Assets: Equity securities $ 5,876 5,876 - $ - Fixed income securities $ 18,406 18,406 - - Cash $ 41,338 41,338 - - $ 120,722 $ 97,717 $ 23,005 $ - Liability: MaxPower acquisition contingent consideration $ 6,870 - - 6,870 There have been no changes in the classification of any financial instruments within the fair value hierarchy in the periods presented. 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 business day of the year. The company-owned life insurance assets are valued in consultation with the Company’s insurance brokers using the value of underlying assets of the insurance contracts. The fair value measurement of the marketable securities held in the rabbi trust is considered a Level 1 measurement and the measurement of the company-owned life insurance assets is considered a Level 2 measurement within the fair value hierarchy. The Company maintains defined benefit retirement plans in certain of its non-U.S. subsidiaries. The assets of the plans are measured at fair value. Equity securities held by the non-U.S. defined benefit retirement plans consist of equity securities that are valued based on quoted market prices on the last business day of the year. The fair value measurement of the equity securities is considered a Level 1 measurement 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 India and corporate notes that are valued based on quoted market prices on the last business day of the year. The fair value measurement of the fixed income securities is considered a Level 1 measurement within the fair value hierarchy. Cash held by the non-U.S. defined benefit retirement plans consists of demand deposits on account in various financial institutions to fund current benefit payments. The carrying amount of the cash approximates its fair value. The Company holds investments in debt securities that are intended to fund a portion of its pension and other postretirement benefit obligations outside of the U.S. The investments are valued based on quoted market prices on the last business day of the year. The fair value measurement of the investments is considered a Level 1 measurement within the fair value hierarchy. F-49 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (dollars in thousands, except per share amounts) Note 18 – Fair Value Measurements (continued) From time to time, the Company purchases precious metals bullion in excess of its immediate manufacturing needs to mitigate the risk of supply shortages or volatile price fluctuations. The metals are valued based on quoted market prices on the last business day of the period. The fair value measurement of the metals are considered a Level 1 measurement within the fair value hierarchy. The inventory of precious metals bullion in excess of its immediate manufacturing needs was not material at December 31, 2023. The Company may be required to make certain contingent consideration payments to non-employee equity holders of MaxPower pursuant to the acquisition agreement, which would be payable upon the achievement of certain technology milestones, upon favorable resolution of certain technology licensing matters with a third party, and upon the disposition of MaxPower's investment in an equity affiliate. One of the contingencies was resolved in the fourth quarter of 2023, which resulted in no additional payments to the former employees and equity holders of MaxPower. The fair value of these contingent payments is determined by estimating the net present value of the expected cash flows based on the probability of expected payments. The fair value measurement of the contingent consideration payments is considered a Level 3 measurement within the fair value hierarchy. The fair value of the long-term debt, excluding the deferred financing costs, at December 31, 2023 and 2022 is approximately $ 836,200 and $ 491,100 , respectively, compared to its carrying value, excluding the deferred financing costs, of $ 845,102 and $ 507,344 , respectively. The Company estimates the fair value of its long-term debt 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 2023 and 2022, the Company’s short-term investments were comprised of time deposits with financial institutions that have maturities that exceed 90 days from the date of acquisition; however they all mature within one year from the respective balance 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 to maturity; therefore, the Company believes it has the intent and ability to hold the short-term investments until maturity. At each reporting 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 these securities during the periods presented. There have been no transfers to or from the held-to-maturity classification. All decreases in the account balance are due to returns of principal at the securities’ maturity dates. Interest on the securities is recognized as interest income when earned. At December 31, 2023 and 2022, the Company’s cash and cash equivalents were comprised of demand deposits, time deposits with maturities of three months or less when purchased, and money market funds. The Company estimates the fair value of its cash, cash equivalents, and short-term investments using level 2 inputs. Based on the current interest rates for similar investments with comparable credit risk and time to maturity, the fair value of the Company's cash, cash equivalents, and held-to-maturity short-term investments approximate the carrying amounts reported in the accompanying consolidated balance sheets. The Company’s financial instruments also include accounts receivable and accounts payable. The carrying amounts for these financial instruments reported in the accompanying consolidated balance sheets approximate their fair values. F-50 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (dollars in thousands, except per share amounts) Note 19 – Related Party Transactions Vishay Precision Group, Inc. On July 6, 2010, Vishay completed the spin-off of its measurements and foil resistors businesses into an independent, publicly-traded company, Vishay Precision Group, Inc. Vishay’s common stockholders received 1 share of VPG common stock for every 14 shares of Vishay common stock they held on the record date, June 25, 2010, and Vishay’s Class B common stockholders received 1 share of VPG Class B common stock for every 14 shares of Vishay Class 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-off Following the spin-off, VPG and Vishay operate separately, each as independent public companies. Vishay has no ownership interest in VPG. However, Ruta Zandman solely or on a shared basis with Marc Zandman and Ziv Shoshani, all of whom are members of Vishay's Board of Directors, control a large portion of the voting power of both Vishay and VPG. Marc Zandman, Vishay’s Executive Chairman of the Board and an executive officer of Vishay, serves on the Board of Directors of VPG. Ziv Shoshani, CEO of VPG, serves as a director of Vishay. Additionally, Timothy V. Talbert, a member of Vishay’s Board of Directors is also a member of the Board of Directors of VPG. In connection with the completion of the spin-off, Vishay and its subsidiaries entered into several agreements with VPG and its subsidiaries that govern the relationship of the parties following the spin-off. Among the agreements entered into with VPG and its subsidiaries were a transition services agreement, several lease agreements, and supply agreements. None of the agreements have had nor are expected to have a material impact on Vishay’s financial position, results of operations, or liquidity. Some of these agreements have 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 certain trademarks, service marks, logos, trade names, entity names, and domain names which include the term “Vishay.” The license granted VPG the limited, exclusive, royalty-free right and license to use certain marks and names incorporating the term “Vishay” in connection with the design, development, manufacture, marketing, provision and performance of certain VPG products that do not compete with any products within Vishay’s product range as constituted immediately following the separation and certain services provided in connection with the products. The license cannot be terminated except as a result of willful misconduct or liquidation bankruptcy of VPG.