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 stock options and restricted stock units (see Note 12), warrants (see Note 7), 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,
	2012		2011		2010

Numerator:
Numerator for basic earnings per share:
Net earnings	$	122,738	$	238,821	$	359,106

Adjustment to the numerator for continuing operations and net earnings:
Interest savings assuming conversion of dilutive convertible and exchangeable notes, net of tax		293		189		257

Numerator for diluted earnings per share:
Net earnings	$	123,031	$	239,010	$	359,363

Denominator:
Denominator for basic earnings per share:
Weighted average shares		149,020		160,094		183,618

Effect of dilutive securities:
Convertible and exchangeable debt instruments		6,176		7,820		6,313
Restricted stock units		549		212		133
Other		99		388		163
Dilutive potential common shares		6,824		8,420		6,609

Denominator for diluted earnings per share:
Adjusted weighted average shares		155,844		168,514		190,227


Basic earnings per share attributable to Vishay stockholders	$	0.82	$	1.49	$	1.96

Diluted earnings per share attributable to Vishay stockholders	$	0.79	$	1.42	$	1.89

Note 16 – Earnings Per Share (continued)

Diluted earnings per share for the years presented do not reflect the following weighted average potential common shares, as the effect would be antidilutive (in thousands):

	Years ended December 31,
	2012		2011		2010
Convertible and exchangeable notes:
Convertible Senior Debentures, due 2040		19,809		9,905		-
Convertible Senior Debentures, due 2041		7,885		5,026		-
Convertible Senior Debentures, due 2042		7,434		-		-
Convertible Subordinated Notes, due 2023		-		-		51
Weighted average employee stock options		177		182		2,243
Weighted average warrants		8,390		8,824		8,824
Weighted average other		282		123		35

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

The Company's convertible debt instruments are only convertible upon the occurrence of certain events. While none of these events has occurred as of December 31, 2012, certain conditions which could trigger conversion have been deemed to be non-substantive, and accordingly, the Company has always assumed the conversion of these instruments in its diluted earnings per share computation during periods in which they are dilutive.

At the direction of its Board of Directors, the Company intends, upon conversion, to repay the principal amount of the convertible senior debentures, due 2040, due 2041, and due 2042, in cash and settle any additional amounts in shares of Vishay common stock. Accordingly, the debentures are included in the diluted earnings per share computation using the "treasury stock method" (similar to options and warrants) rather than the "if converted method" otherwise required for convertible debt. Under the "treasury stock method," Vishay calculates the number of shares issuable under the terms of the notes based on the average market price of Vishay common stock during the period, and that number is included in the total diluted shares figure for the period. If the average market price is less than $13.88, no shares are included in the diluted earnings per share computation for the convertible senior debentures due 2040, if the average market price is less than $19.02, no shares are included in the diluted earnings per share computation for the convertible senior debentures due 2041, and if the average market price is less than $11.81, no shares are included in the diluted earnings per share computation for the convertible senior debentures due 2042.

As described in Note 6, the Company purchased 99.6% of the outstanding convertible subordinated notes due 2023 pursuant to the option of the holders to require the Company to repurchase their notes on August 1, 2008. The remaining notes, with an aggregate principal amount of $1,870, were redeemed at Vishay's option on August 1, 2010.