Note 10 – Segment Information

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, five 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 and inductors both impede electric current. 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. A small portion of revenues is from royalties.

The Company evaluates business segment performance on operating income, exclusive of certain items ("segment operating income"). Only dedicated, direct selling, general, and administrative expenses of the segments are included in the calculation of segment operating income. The Company's calculation of segment operating income excludes such selling, general, and administrative costs as global operations, sales and marketing, information systems, finance and administration groups, as well as restructuring and severance costs, goodwill and long-lived asset impairment charges, and other items. 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.

The Company also regularly evaluates gross profit by segment to assist in the analysis of consolidated gross profit. The Company considers segment operating income to be the more important metric because it more fully captures the business operations of the segments.

The following tables set forth business segment information:

	MOSFETs		Diodes		Optoelectronic Components		Resistors & Inductors		Capacitors		Total
Fiscal quarter ended September 29, 2018:
Product Sales	$	144,227	$	186,492	$	76,443	$	257,330	$	116,447	$	780,939
Royalty Revenues		33		-		-		-		-	$	33
Total Revenue	$	144,260	$	186,492	$	76,443	$	257,330	$	116,447	$	780,972

Gross Profit	$	38,991	$	54,690	$	27,653	$	88,213	$	26,749	$	236,296

Segment Operating Income	$	29,502	$	49,561	$	23,144	$	80,042	$	21,655	$	203,904

Fiscal quarter ended September 30, 2017:*
Product Sales	$	126,522	$	160,562	$	77,145	$	217,489	$	96,215	$	677,933
Royalty Revenues		-		-		-		8		-	$	8
Total Revenue	$	126,522	$	160,562	$	77,145	$	217,497	$	96,215	$	677,941

Gross Profit	$	32,349	$	43,575	$	29,042	$	65,586	$	19,595	$	190,147

Segment Operating Income	$	23,434	$	38,694	$	25,214	$	58,328	$	14,705	$	160,375

Nine fiscal months ended September 29, 2018:
Product Sales	$	408,280	$	535,975	$	224,110	$	755,262	$	335,064	$	2,258,691
Royalty Revenues		45		-		-		61		-	$	106
Total Revenue	$	408,325	$	535,975	$	224,110	$	755,323	$	335,064	$	2,258,797

Gross Profit	$	109,440	$	150,298	$	81,290	$	251,712	$	76,094	$	668,834

Segment Operating Income	$	80,577	$	134,592	$	68,103	$	226,292	$	60,258	$	569,822

Nine fiscal months ended September 30, 2017:*
Product Sales	$	345,399	$	460,492	$	215,040	$	626,684	$	278,241	$	1,925,856
Royalty Revenues		-		-		-		50		-	$	50
Total Revenue	$	345,399	$	460,492	$	215,040	$	626,734	$	278,241	$	1,925,906

Gross Profit	$	78,423	$	123,499	$	77,091	$	188,936	$	57,784	$	525,733

Segment Operating Income	$	51,917	$	109,014	$	64,007	$	167,035	$	43,041	$	435,014

*Recast for the retrospective adoption of ASUs 2014-09 and 2017-07. See Note 1.

	Fiscal quarters ended						Nine fiscal months ended
	September 29, 2018			September 30, 2017***			September 29, 2018			September 30, 2017***
Reconciliation:
Segment Operating Income	$	203,904		$	160,375		$	569,822		$	435,014
Restructuring and Severance Costs		-			(3,244	)		-			(5,194	)
Unallocated Selling, General, and Administrative Expenses		(65,806	)		(61,715	)		(204,369	)		(181,821	)
Consolidated Operating Income	$	138,098		$	95,416		$	365,453		$	247,999
Unallocated Other Income (Expense)		(11,290	)		(9,228	)		(49,067	)		(35,660	)
Consolidated Income Before Taxes	$	126,808		$	86,188		$	316,386		$	212,339

***Recast for the adoption of ASU 2017-07. See Note 1.

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:

	Fiscal quarters ended				Nine fiscal months ended				Years Ended December 31,
	September 29, 2018		September 30, 2017		September 29, 2018		September 30, 2017		2017		2016
Distributors	$	452,051	$	383,727	$	1,302,127	$	1,102,232	$	1,484,276	$	1,280,060
OEMs		276,299		247,551		803,128		685,565		931,291		861,322
EMS companies		52,622		46,663		153,542		138,109		183,801		175,946
Total Revenue	$	780,972	$	677,941	$	2,258,797	$	1,925,906	$	2,599,368	$	2,317,328

Net revenues were attributable to customers in the following regions:

	Fiscal quarters ended				Nine fiscal months ended				Years Ended December 31,
	September 29, 2018		September 30, 2017		September 29, 2018		September 30, 2017		2017		2016
Asia	$	315,701	$	282,416	$	904,047	$	811,987	$	1,091,107	$	948,195
Europe		269,518		237,874		809,501		665,049		902,357		810,543
Americas		195,753		157,651		545,249		448,870		605,904		558,590
Total Revenue	$	780,972	$	677,941	$	2,258,797	$	1,925,906	$	2,599,368	$	2,317,328

The Company generates substantially all of its revenue from product sales to end customers in the industrial, automotive, telecommunications, computing, consumer products, power supplies, military and aerospace, and medical end markets. Sales by end market are presented below:

	Fiscal quarters ended				Nine fiscal months ended				Years Ended December 31,
	September 29, 2018		September 30, 2017		September 29, 2018		September 30, 2017		2017		2016
Industrial	$	283,134	$	242,038	$	858,963	$	691,678	$	934,631	$	796,031
Automotive		224,041		185,781		642,293		537,008		727,220		640,767
Telecommunications		51,935		50,710		144,326		143,828		190,682		193,456
Computing		62,774		55,380		163,862		143,948		198,850		172,481
Consumer Products		48,583		40,155		126,781		108,711		145,243		150,741
Power Supplies		34,899		44,327		110,468		120,223		160,038		132,555
Military and Aerospace		41,881		33,029		117,355		98,753		132,898		128,523
Medical		33,725		26,521		94,749		81,757		109,806		102,774
Total revenue	$	780,972	$	677,941		2,258,797		1,925,906	$	2,599,368	$	2,317,328