Note 10 – Earnings Per Share

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

	Fiscal quarters ended				Nine fiscal months ended
	September 30, 2017		October 1, 2016		September 30, 2017		October 1, 2016

Numerator:
Numerator for basic earnings per share:
Net earnings attributable to Vishay stockholders	$	64,404	$	36,440	$	157,313	$	97,540

Interest savings assuming conversion of dilutive exchangeable notes, net of tax		-		-		-		38

Numerator for diluted earnings per share:
Net earnings attributable to Vishay stockholders - diluted	$	64,404	$	36,440	$	157,313	$	97,578

Denominator:
Denominator for basic earnings per share:
Weighted average shares		145,572		146,781		145,973		147,327
Outstanding phantom stock units		156		143		155		143
Adjusted weighted average shares		145,728		146,924		146,128		147,470

Effect of dilutive securities:
Convertible and exchangeable debt instruments		10,480		2,541		9,160		2,387
Restricted stock units		493		423		338		266
Other		-		6		-		2
Dilutive potential common shares		10,973		2,970		9,498		2,655

Denominator for diluted earnings per share:
Adjusted weighted average shares - diluted		156,701		149,894		155,626		150,125

Basic earnings per share attributable to Vishay stockholders	$	0.44	$	0.25	$	1.08	$	0.66

Diluted earnings per share attributable to Vishay stockholders	$	0.41	$	0.24	$	1.01	$	0.65

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

	Fiscal quarters ended				Nine fiscal months ended
	September 30, 2017		October 1, 2016		September 30, 2017		October 1, 2016
Convertible notes:
Convertible Senior Debentures, due 2040		-		-		-		13,750
Convertible Senior Debentures, due 2041		8,401		8,268		8,371		8,229
Weighted average employee stock options		-		77		-		96
Weighted average other		379		415		514		545

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 for specified periods upon the occurrence of certain events. The convertible debentures due 2042 became convertible subsequent to the December 31, 2016 evaluation of the conversion criteria, remained convertible subsequent to the April 1, 2017 and July 1, 2017 evaluations, and remain convertible subsequent to the September 30, 2017 evaluation. The convertible debentures due 2040 became convertible subsequent to the September 30, 2017 evaluation of the conversion criteria. In periods that the debentures are not convertible, the certain conditions which could trigger conversion of the remaining debentures have been deemed to be non-substantive, and accordingly, the Company assumes the conversion of these instruments in its diluted earnings per share computation during periods in which they are dilutive.

At the direction of its Board of Directors, the Company intends, upon conversion, to repay the principal amounts of the convertible senior debentures, due 2040, 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 debentures 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 $12.99, 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 $17.80, 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 $11.05, no shares are included in the diluted earnings per share computation for the convertible senior debentures due 2042.