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92116_1993.txt	92116	1993	Item 1. Business General Southern California Water Company (the "Registrant") is a public utility company engaged principally in the purchase, production, distribution and sale of water. The Registrant also distributes electricity in one community. The Registrant, regulated by the California Public Utilities Commission ("CPUC"), was incorporated in 1929 under the laws of the State of California as American States Water Services Company of California as the result of the consolidation of 20 water utility companies. From time to time additional water companies and municipal water districts have been acquired and properties in limited service areas have been sold. The Registrant's present name was adopted in 1936. At December 31, 1993, the Registrant provided service in 17 separate operating districts, 16 of which were water districts and one an electric district, located in 75 communities in ten counties throughout the State of California. Total population of the service areas on December 31, 1993 was approximately 1,000,000. As of that date, about 73% of the Registrant's water customers were located in the greater metropolitan areas of Los Angeles and Orange Counties. The Registrant provided electric service to the City of Big Bear Lake and surrounding areas in San Bernardino County. All electric energy sold is purchased from Southern California Edison Company ("SCE") on a resale rate schedule. The Registrant served 236,985 water customers and 20,131 electric customers at December 31, 1993, or a total of 257,116 customers compared with 255,966 total customers at December 31, 1992. For the year ended December 31, 1993, approximately 90% of the Registrant's operating revenues were derived from water sales and approximately 10% from the sale of electricity, ratios which are generally consistent with prior years. Operating income before taxes on income of the electric district was 9.2% of the Registrant's total operating income before taxes. The material contained in Note 12 of the Notes to Financial Statements included in the 1993 Annual Report to Shareholders provides additional information on business segments while Note 13 provides information regarding the seasonal nature of the Registrant's business. Page 15 of the 1993 Annual Report to Shareholders lists the geographical distribution of customers. During 1993, the Registrant supplied, from all sources, a total of 178,196 acre feet of water compared with 172,500 acre feet for the previous year. Of the total water supplied in 1993, approximately 43% was purchased from others, principally from member agencies of the Metropolitan Water District of Southern California ("MWD"), and 1% was furnished by the Bureau of Reclamation under contract, at no cost, for the Registrant's Arden-Cordova District and to the Registrant's Clearlake district by prescriptive right to water extracted from Clear Lake. These amounts reflect a continued reduction in reliance on imported water supplies. The MWD is a water district organized under the laws of the State of California for the purpose of delivering imported water to areas within its jurisdiction which includes most of coastal Southern California from the County of Ventura south to and including San Diego County. The Registrant has 52 connections to the water distribution facilities of MWD and other municipal water agencies. MWD imports water from two principal sources: the Colorado River and the State Water Project ("SWP"). Available water supplies from the Colorado River and the SWP have historically been sufficient to meet most of MWD's requirements even though the State's major reservoirs were significantly impacted by six years of drought. The drought officially ended in February, 1993. The price of water purchased from MWD, however, is expected to continue to increase. MWD announced a 7% rate adjustment on March 8, 1994, effective for the 1994-1995 fiscal year. In those districts of the Registrant which pump groundwater, overall groundwater conditions continue to maintain at adequate levels. The Registrant drilled six new wells during 1993 in order to improve the Registrant's ability to use more groundwater in its resource mix and further decrease its dependence on purchased water. The Registrant is continuing its efforts to become a participant in the Coastal Aqueduct extension of the State Water Project (the "Project"). The Registrant believes that participation in the Project is necessary in order to provide another source of water for its Santa Maria water district. Should the Registrant be allowed to participate in the Project at a 500 acre-foot level, the Registrant will prepare a filing with the CPUC in order to recover costs associated with that participation under normal rate-making methods. A final decision of the CPUC on the application would not be anticipated until late 1994 or early 1995. Rates and Regulation The Registrant is subject to regulation by the CPUC as to its water and electric business and properties. The CPUC has broad powers of regulation over public utilities with respect to service and facilities, rates, classifications of accounts, valuation of properties and the purchase, disposition and mortgaging of properties necessary or useful in rendering public utility service. It also has authority over the issuance of securities, the granting of certificates of convenience and necessity as to the extension of services and facilities and various other matters. Water rates of the Registrant vary from district to district due to differences in operating conditions and costs. Each operating district is considered a separate entity for rate-making purposes. The Registrant continuously monitors its operations in all of its districts so that applications for rate changes may be filed, when warranted, on a district-by-district basis in accordance with CPUC procedure. Under the CPUC's practices, rates may be increased by three methods - general rate increases, offsets for certain expense increases and advice letter filings related to certain plant additions. General rate increases typically are for three year periods and include "step" increases in rates for the second and third years. General rate increases are established by formal proceedings in which the overall rate structure, expenses and rate base of the district are examined. Rates are based on estimated expenses and capital costs for a forward two-year period. A major feature of the proceeding is the use of an attrition mechanism for setting rates for the third of the three year test cycle assuming that the costs and expenses will increase in the same proportion over the second year as the increase projected for the second test year increased over the first test year. The step rate increases for the second and third years are allowed to compensate for the projected cost increases, but are subject to tests including a demonstration that earnings levels in the district did not exceed the latest rate of return authorized for the Registrant. Formal general rate proceedings typically take about twelve months from the filing of a Notice of Intent to increase rates to the authorization of new rates. Rate increases to offset increases in certain expenses such as costs of purchased water, energy costs to pump water, costs of power purchased for resale and groundwater production assessments are accomplished through an abbreviated "offset" procedure that typically takes about two months. CPUC regulations require utilities to maintain balancing accounts which reflect differences between specific offset cost increases and the rate increases authorized to offset those costs. The balancing accounts are subject to amortization through the offset procedure or through general rate decisions. An advice letter, or rate base offset, proceeding is generally undertaken on an order of the CPUC in a general rate proceeding wherein the inclusion of certain projected plant facilities in future rates is delayed pending notification that such facilities have actually been placed in service. The advice letter provides such notification and, after CPUC approval, permits the Registrant to include the costs associated with the facilities in rates. During 1993, 1992 and 1991, the Registrant's rates for all water districts were increased, among other reasons, to directly offset increases in certain expenses, principally purchased water, as well as increased levels of capital improvements. The Registrant decreased rates in its Bear Valley electric district by approximately 28% in November, 1991 as a result of amortizing large refunds from the Registrant's wholesale power supplier. The following table lists information related to the Registrant's rate increases for the last three years: The Registrant filed an application for general rate increases in six of its water operating districts in May, 1992. In June, 1993, the CPUC issued its decision and the Registrant requested rehearing on two matters - the rate of return on rate base and an authorized rate increase for the Registrant's Bay Point water district. The CPUC granted the Registrant's request for rehearing on the two issues and established an interim rate of return on rate base of 9.5% applicable for certain attrition, step rate filings and other earnings test filings with respect to the Registrant's other operating districts. For further information, please see the caption "Rates and Regulation" under Management's Discussion and Analysis herein and Note 10 of the Notes to Financial Statements in the 1993 Annual Report to Shareholders. The Registrant has filed its case on the two matters set for rehearing, which was held on March 15, 1994. Prior to commencement of hearings, the Registrant and the Division of Ratepayer Advocates ("DRA") of the CPUC had stipulated to a rate of return on common equity of 10.10%. In addition, DRA had agreed that an increase in rates applicable to the Registrant's Bay Point water district was appropriate with certain modifications as to the level of rate base. A final decision on these matters, however, is still subject to the CPUC and is not expected until the Summer of 1994. The Registrant anticipates filing applications with the CPUC in July, 1994 for rate increases, effective in 1995, in all of its operating districts for certain cost-effective recommendations resulting from the recently completed Management Audit of the Registrant conducted under the auspices of the CPUC. In addition, the Registrant will file a general rate case in one of its water operating districts. The requested annual increase in rates will also seek step increases for 1996 and 1997. No assurance can be given that the CPUC will authorize any or all of the rates for which the Registrant applies. Industrial Relations The Registrant had 486 paid employees as of December 31, 1993. Seventeen employees in the Bear Valley Electric District were members of the International Brotherhood of Electrical Workers. Their present labor agreement is effective through June 30, 1994. Seventy-three of the Registrant's water utility employees, unionized under the Utility Workers of America ("UWA"), are covered by a contract which expires March 31, 1996. The Registrant has no other unionized employees. Environmental Matters The Environmental Protection Agency ("EPA"), under provisions of the Safe Drinking Water Act, as amended, is required to establish Maximum Contaminant Levels ("MCL's") for the 83 potential drinking water contaminants initially listed in the Act, and for an additional 25 contaminants every three years thereafter. The California Department of Health Services ("DOHS"), acting on behalf of the EPA, administers the EPA's program. The Registrant continues to test its wells and water systems for more than 90 contaminants. Water from wells found to contain levels of contaminants above the established MCL's has either been treated or blended before it is delivered to customers. Only 2 of the Registrant's 306 wells have been permanently taken out of service due to high levels of contamination. The Registrant is aware of two new rules pending implementation by the EPA which may significantly affect the Registrant: the Radon Rule and the Arsenic Rule. The EPA did not meet the October 1, 1993 deadline for establishing an MCL for radon. Because of this inaction, the rule is presently in the hands of the United States Congress where it is believed that an MCL will be established primarily to implement the regulation. However, the 1994 budget as drafted by the Appropriations Committee has specifically excluded funds for further work on radon regulation, basically setting a moratorium on the regulation. The EPA is continuing its review of data on the Arsenic Rule although the Registrant anticipates an MCL will be proposed by September, 1994. The Registrant is unable to predict, until the MCL's are established, what effects, if any, these new rules will have on its financial condition or results of operation. The Registrant has experienced increased operating costs for testing to determine the levels (if any) of the contaminants in the Registrant's source of supply and costs to lower the level of any contaminants found to a level that meets standards. Such costs and the control of any other pollutants may include capital costs as well as increased operating costs. The rate-making process provides the Registrant with the opportunity to recover capital and operating costs associated with water quality, and management believes that such costs are properly recoverable. Item 2	Item 2 - Properties Franchises, Competition, Acquisitions and Condemnation of Properties The Registrant holds the required franchises from the incorporated communities and the counties which it serves. The Registrant holds certificates of public convenience and necessity granted by the CPUC in each of the 17 districts it serves. The business of the Registrant is substantially free from direct competition with other public utilities, municipalities and other public agencies. The Registrant's certificates, franchises and similar rights are subject to alteration, suspension or repeal by the respective governmental authorities having jurisdiction over such matters. The laws of the State of California provide for the acquisition of public utility property by governmental agencies through their power of eminent domain, also known as condemnation. The Registrant has been, within the last three years, involved in activities related to the condemnation of its Big Bear and Bay Point water districts. The Registrant continues to oppose the condemnation actions with respect to its Bay Point water district initiated by the Contra Costa Water District in 1992. Note 8 of the Notes to Financial Statements contained in the 1993 Annual Report to Shareholders herein describes condemnation actions related to the Registrant's properties in greater detail. Water Properties As of December 31, 1993, the Registrant's physical properties consisted of water transmission and distribution systems which included over 2,560 miles of pipeline together with services, meters and fire hydrants and approximately 438 parcels of land (generally less than 1 acre each) on which are located wells, pumping plants, reservoirs and other utility facilities. The Registrant's operating properties have been maintained and improved in the ordinary course of business. As of December 31, 1993, the Registrant owned and operated 306 wells equipped with pumps with an aggregate capacity of 265.7 million gallons per day ("MGD"). Other production facilities include filter plants with an aggregate capacity of 29.4 MGD and 52 connections to the water distribution facilities of the MWD and other municipal water agencies. The Registrant's storage reservoirs and tanks have an aggregate capacity of 156.6 million gallons. There are no dams in the Registrant's system. Electric Properties The Registrant's electric properties are all located in the Big Bear area of San Bernardino County. As of December 31, 1993, the Registrant operated 28.8 miles of overhead 34.5 KV transmission lines, 0.6 miles of underground 34.5 KV transmission lines, 172.7 miles of 4.16 KV or 2.4 KV distribution lines, 41.7 miles of underground cable and 14 sub-stations. There are no generating plants in the Registrant's system. Other Properties The Registrant's general offices are housed in a single-story office building located in San Dimas, California. The land and the building, which was completed and occupied in early 1990, are owned by the Registrant. Certain of the Registrant's district offices are housed in leased premises. During 1993, the Registrant refinanced a significant portion of its then outstanding debt in order to lower interest costs. In doing so, the Registrant redeemed all outstanding First Mortgage Bonds. In early 1994, the Trustee filed for release of the lien of an indenture securing the previously outstanding First Mortgage Bonds. As of December 31, 1993, the Registrant had no mortgage debt outstanding. Financing of Construction Expenditures The Registrant's construction program is designed to ensure its customers with high quality service. The Registrant has an ongoing distribution main replacement program, throughout its service areas, based upon the priority of leaks detected, fire protection enhancement and a reflection of the underlying replacement schedule. In addition, the Registrant upgrades its electric and water supply facilities and is aggressively scheduling meter replacements. The Registrant anticipates gross capital expenditures of $26,700,000, $17,500,000 and $34,500,000 in 1994, 1995 and 1996, respectively. During 1993, the Registrant issued 1,107,000 Common Shares (on a post-split basis) in two separate public offerings for aggregate net proceeds of $23,935,000. The net proceeds were applied against then outstanding short-term bank borrowing incurred to temporarily finance construction expenditures. The Registrant issued additional common equity through its Dividend Reinvestment and Common Share Purchase Plan and its 401-k Plan. The Registrant issued 47,828, 28,416 and 29,146 shares under the Dividend Reinvestment and Common Share Purchase Plan in the three years ended December 31, 1993, 1992 and 1991, respectively. The Registrant issued 7,741 and 7,102 Common Shares under the 401-k Plan in the two years ended December 31, 1993 and 1992. The Registrant did not issue any Common Shares through its 401-k Plan in the year ended December 31, 1991. During 1993 and 1992, the Registrant did not undertake any long-term debt financing to provide additional funds for construction. In 1993, however, the Registrant did refinance $37 million of its long-term debt, in order to reduce interest expense, through its Medium Term Note Program. In 1992, the Registrant entered into a $2,247,000 fixed rate obligation due 2013 for financing construction of a new reservoir serving one of the Registrant's water operating districts. In May, 1991, the Registrant completed the sale of $28,000,000 in long-term Notes Due 2031, $13,500,000 of which was used to repay then outstanding short-term bank loans which had been used to fund the Registrant's construction program. In addition, in December, 1991, the Registrant redeemed, at a premium, $6,000,000 principal amount of 11-3/4% Notes. The remainder of the proceeds from the May, 1991 issue was utilized to fund the Registrant's capital expansion program. Item 3.	Item 3. Legal Proceedings On October 20, 1993, the Registrant and the Internal Revenue Service ("IRS") reached a tentative settlement on the results of the IRS examination of the Registrant's 1987, 1988 and 1989 tax returns. Based on the settlement, the Registrant remitted an additional $438,000 in taxes. The Registrant anticipates signing the final agreement in late March, 1994. On March 8, 1994, the Registrant and the Contra Costa County Board of Supervisors (the "County") reached a tentative settlement of issues related to the County's taking on the Registrant's Madison Treatment plant in its Bay Point water district. The County's Highway Department had taken possession of the property on June 24, 1993. The tentative settlement of $2.3 million includes remuneration to the Registrant for the value of the property taken, severance damages, if any, and reimbursement for treated water purchased from the City of Pittsburg. The amount determined as remuneration for the value of the property taken is to be applied against the value of the Registrant's Bay Point district, currently under condemnation by the Contra Costa Water District ("CCWD"). The Registrant and CCWD, however, are continuing their negotiations concerning the CCWD's condemnation of the Registrant's Bay Point water district. At this time, however, the Registrant is unable to predict the final outcome of these negotiations. In 1993, water revenues from the Registrant's Bay Point water district were approximately $2.7 million or 2.75% of its total annual water revenues. There are no other material pending legal proceedings, other than litigation incidental to the ordinary course of business, to which the Registrant is a party or of which any of its properties is the subject. Item 4.	Item 4. Submission of Matters to a Vote of Security Holders No matter was submitted during the fourth quarter of the fiscal year covered by this report to a vote of security holders through the solicitation of proxies or otherwise. PART II Item 5.	Item 5. Market for Registrant's Common Equity and Related Stockholder Matters (a) Market Price for Common Shares Information responding to Item 5(a) is included in the 1993 Annual Report to Shareholders, under the caption "Trading of Stock" located on the inside back cover, filed herein by the Registrant with the Commission pursuant to Regulation 14A and is incorporated herein pursuant to General Instruction G(2). (b) Approximate Number of Holders of Common Shares As of February 28, 1994, there were 4,342 holders of record of Common Shares. (c) Frequency and Amount of Any Dividends Declared and Dividend Restrictions Information responding to Item 5(c) is included in the 1993 Annual Report to Shareholders, under the caption "Trading of Stock" located on the inside back cover, filed herein by the Registrant with the Commission pursuant to Regulation 14A and is incorporated by reference herein pursuant to General Instruction G(2). For the last three years, the Registrant has paid dividends on its Common Shares on March 1, June 1, September 1 and December 1. Additional information responding to Item 5(c) is included in the 1993 Annual Report to Shareholders, under Note 3 of the Notes to Financial Statements captioned "Common Share Dividend Restriction" on page 31, filed herein by the Registrant with the Commission pursuant to Regulation 14A and is incorporated herein by reference pursuant to General Instruction G(2). Item 6.	Item 6. Selected Financial Data Information responding to Item 6 is included in the 1993 Annual Report to Shareholders, in the section entitled "Financial Information" under the caption "Statistical Review from 1989 to 1993" on Page 36, filed herein by the Registrant with the Commission pursuant to Regulation 14A and is incorporated herein by reference pursuant to General Instruction G(2). Item 7.	Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operation Information responding to Item 7 is included in the 1993 Annual Report to Shareholders, under the caption "Management's Discussion and Analysis" on Pages 17 through 23, filed herein by the Registrant with the Commission pursuant to Regulation 14A and is incorporated herein by reference pursuant to General Instruction G(2). Item 8.	Item 8. Financial Statements and Supplementary Data Information responding to Item 8 is included in the 1993 Annual Report to Shareholders, under the captions contained on Pages 24 through 35, filed herein by the Registrant with the Commission pursuant to Regulation 14A and is incorporated herein by reference pursuant to General Instruction G(2). Balance Sheets - December 31, 1993 and 1992 Statements of Capitalization - December 31, 1993 and 1992 Statements of Income for the years ended December 31, 1993, 1992 and 1991 Statements of Changes in Common Shareholders' Equity for the years ended December 31, 1993, 1992 and 1991 Statements of Cash Flows for the years ended December 31, 1993, 1992 and 1991 Notes to Financial Statements Report of Independent Public Accountants Item 9.	Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure None PART III Item 10.	Item 10. Directors and Executive Officers of the Registrant Information responding to Item 10 was included in the Proxy Statement, under the caption "Executive Officers Experience and Compensation", filed by the Registrant with the Commission on or about March 18, 1994 pursuant to Regulation 14A and is incorporated by reference herein pursuant to General Instruction G(3). Item 11.	Item 11. Executive Compensation Information responding to Item 11 was included in the Proxy Statement, under the captions "Executive Officers Experience and Compensation" and "Board Report on Executive Compensation", filed by the Registrant with the Commission on March 18, 1994 pursuant to Regulation 14A and is incorporated by reference herein pursuant to General Instruction G(3). Item 12.	Item 12. Security Ownership of Certain Beneficial Owners and Management Information responding to Item 12 was included in the Proxy Statement, under the captions "Election of Directors" and "Executive Officers Experience and Compensation", filed by the Registrant with the Commission on March 18, 1994 pursuant to Regulation 14A and is incorporated by reference herein pursuant to General Instruction G(3). Item 13.	Item 13. Certain Relationships and Related Transactions Information responding to Item 13 was included in the Proxy Statement, under the caption "Election of Directors", filed by the Registrant with the Commission on March 18, 1994 pursuant to Regulation 14A and is incorporated by reference herein pursuant to General Instruction G(3). PART IV Item 14.	Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K _____________________ * Filed herewith REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS ON THE SUPPLEMENTAL SCHEDULES To the Shareholders and the Board of Directors Of Southern California Water Company: We have audited, in accordance with generally accepted auditing standards, the financial statements included in Southern California Water Company's 1993 Annual Report to Shareholders incorporated by reference in this Form 10-K, and have issued our report thereon dated February 15, 1994. Our audit was made for the purpose of forming an opinion on those basic financial statements taken as a whole. The supplemental schedules listed in Part IV of this Form 10-K, which are the responsibility of the company's management, are presented for purposes of complying with the Securities and Exchange Commission's rules and regulations and are not part of the basic financial statements. These supplemental schedules have been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, fairly state in all material respects the financial data required to be set forth therein in relation to the basic financial statements taken as a whole. ARTHUR ANDERSEN & CO. Los Angeles, California February 15, 1994 SOUTHERN CALIFORNIA WATER COMPANY SCHEDULE V - TANGIBLE & INTANGIBLE PROPERTY, PLANT & EQUIPMENT FOR THE YEAR ENDED DECEMBER 31, 1993 (1) Includes property added under install and convey contracts of $819,000. (2) Additions to Construction Work in Progress are net of transfers to plant in service which are shown as additions to the various operating plant classifications. SOUTHERN CALIFORNIA WATER COMPANY SCHEDULE V - TANGIBLE & INTANGIBLE PROPERTY, PLANT & EQUIPMENT FOR THE YEAR ENDED DECEMBER 31, 1992 (1) Includes property added under install and convey contracts of $3,119,000. (2) Additions to Construction Work in Progress are net of transfers to plant in service which are shown as additions to the various operating plant classifications. SOUTHERN CALIFORNIA WATER COMPANY SCHEDULE V - TANGIBLE & INTANGIBLE PROPERTY, PLANT & EQUIPMENT FOR THE YEAR ENDED DECEMBER 31, 1991 (1) Includes property added under install and convey contracts of $1,398,000. (2) Additions to Construction Work in Progress are net of transfers to plant in service which are shown as additions to the various operating plant classifications. SOUTHERN CALIFORNIA WATER COMPANY SCHEDULE VI - RESERVES FOR ACCUMULATED DEPRECIATION FOR THE YEAR ENDED DECEMBER 31, 1993 (1) A remaining life method of calculating depreciation is used by the Company with rates varying from a minimum of .01% to a maximum of 27.73%, for 1993. The annual calculation is based on depreciable plant at the beginning of each year. SOUTHERN CALIFORNIA WATER COMPANY SCHEDULE VI - RESERVES FOR ACCUMULATED DEPRECIATION FOR THE YEAR ENDED DECEMBER 31, 1992 (1) A remaining life method of calculating depreciation is used by the Company with rates varying from a minimum of .05% to a maximum of 27.73%, for 1992. The annual calculation is based on depreciable plant at the beginning of each year. SOUTHERN CALIFORNIA WATER COMPANY SCHEDULE VI - RESERVES FOR ACCUMULATED DEPRECIATION FOR THE YEAR ENDED DECEMBER 31, 1991 (1) A remaining life method of calculating depreciation is used by the Company with rates varying from a minimum of .05% to a maximum of 26.91%, for 1991. The annual calculation is based on depreciable plant at the beginning of each year. SOUTHERN CALIFORNIA WATER COMPANY SCHEDULE VIII - RESERVES FOR UNCOLLECTIBLE ACCOUNTS FOR THE YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991 SIGNATURES Pursuant to the requirements 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. SOUTHERN CALIFORNIA WATER COMPANY By : s/ JAMES B. GALLAGHER . ----------------------------- James B. Gallagher Secretary, Treasurer and Chief Financial Officer Date: March 25, 1994 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.
103730_1993.txt	103730	1993	Item 1. DESCRIPTION OF BUSINESS - - - -------------------------------- General Vishay Intertechnology, Inc. (together with its consolidated subsidiaries, "Vishay" or the "Company") is a leading international manufacturer and supplier of passive electronic components, particularly resistors and tantalum and film capacitors. Resistors, the most common component in electronic circuits, are used to adjust and regulate levels of voltage and current. Capacitors perform energy storage, frequency control, timing and filtering functions in almost all types of electronic equipment. The Company's products are used in a broad variety of electronic applications, including those in the computer, telecommunications, military/aerospace, instrument, industrial, automotive, office equipment and entertainment industries. Through a series of acquisitions over the last eight years, the Company has grown from a small manufacturer of precision resistors and strain gages to one of the world's largest manufac- turers and suppliers of a broad line of passive electronic compo- nents. The Company's acquisition strategy has focused on acquiring manufacturers of those types of quality products in which the Company has strong marketing organizations and technical expertise but who have encountered operating, financial or management difficulties. In connection with each acquisition, the Company has implemented programs to realize synergies between its existing businesses and the acquired business. These programs have focused on reducing selling, general and administrative expenses and maximizing production efficiencies, including the integration of redundant sales offices and administrative functions and the transfer of some production operations to regions where the Company can take advantage of lower labor costs and available tax and other incentives. The Company's first major acquisition was the purchase in 1985 of a 50% interest in Dale Electronics, Inc. ("Dale"), a United States producer of precision and commercial resistors, magnetic components and plasma displays. In 1987, the Company established a major presence in Germany with the acquisition of Draloric Electronic GmbH ("Draloric"), strengthening the Company's metal film resistor and specialty resistor businesses. In 1988, the Company acquired the remaining 50% interest in Dale as well as all of the outstanding shares of Sfernice, S.A., a French manufacturer of resistors, potentiometers and printed circuit boards. Subse- quently, Vishay acquired several small United States inductor manufacturers and one French inductor manufacturer. In 1992, the Company acquired the worldwide tantalum capacitor and United States thick film resistor network businesses of American Annuity Group, Inc., formerly Sprague Technologies, Inc. ("STI"). In January 1993, Vishay exercised its option to purchase 81% of the outstanding share capital of Roederstein Spezialfabriken fur Bauelemente der Elektronik und Kondensatoren der Starkstromtechnik GmbH ("Roederstein"). Vishay acquired its initial 19% interest in Roederstein in February 1992. Roederstein's principal products include film, aluminum electrolytic and tantalum capacitors as well as resistors. It also manufactures single layer ceramic capacitors, heavy current capacitors and triplers. Most recently, on July 2, 1993, Vishay acquired the assets of the tantalum capacitor business of Philips Electronics North America Corporation, a subsidiary of Philips Electronics N.V., for approximately $11 million. The Company currently operates as five separate business units: (i) Vishay Electronic Components, U.S., which is comprised of Dale, a manufacturer and supplier of resistors, the Vishay Resistive Systems Unit, which primarily manufactures high performance foil resistors and thin film resistor networks, and Sprague, which consists of the tantalum capacitor and thick film resistor network manufacturing businesses acquired from STI; (ii) Draloric/Roederstein, German-based manufacturers and suppliers of resistors and capacitors in Europe; (iii) Sfernice, S.A., a resistor producer in France; (iv) Measurements Group, Inc., which produces resistive sensors and other stress measuring devices in the United States; and (v) Vishay Components (UK) Ltd., a manufacturer and supplier of the Company's products in the United Kingdom. Vishay was incorporated in Delaware in 1962 and maintains its principal executive offices at 63 Lincoln Highway, Malvern, Pennsylvania 19355-2120. The telephone number is (610) 644-1300. Products Vishay designs, manufactures and markets electronic components that cover a wide range of products and technologies. The products primarily consist of fixed resistors, tantalum and film capacitors, and, to a lesser extent, inductors, specialty ceramic capacitors, transformers, potentiometers, plasma displays and thermistors. Resistors are basic components used in all forms of electronic circuitry to adjust and regulate levels of voltage and current. They vary widely in precision and cost, and are manufactured in numerous materials and forms. Resistive components may be either fixed or variable, the distinction being whether the resistance is adjustable (variable) or not (fixed). Resistors can also be used as measuring devices, such as Vishay's resistive sensors. Resistive sensors, or strain gages, are used in electronic measurement and experimental stress analysis systems, as well as in transducers, for measuring loads (scales), acceleration and fluid pressure. Fixed resistive components can be broadly categorized as discrete components or networks. A discrete component is designed to perform a single function and is incorporated by the customer in the circuitry of a system which requires that particular function. A network, on the other hand, is a microcircuit (consisting of a number of resistors placed on a ceramic base), which is designed to perform a number of standard functions. Vishay manufactures discrete resistors and networks both of which are principally sold in the precision or higher quality segments of the resistor market (i.e., fixed precision wirewound, metal film and foil resistors and network resistors). The Company's resistive products primarily consist of fixed resistors (foil and thin film resistors, wire-wound resistors, metal film resistors, oxide film resistors, thermistors, thick film resistor chips, networks (microcircuits) and resistive sensors); variable resistors (trimmers and potentiometers); magnetic components (inductors and transformers) and printed circuit boards. Vishay produces resistors for virtually every segment of the resistive product market, from resistors used in the highest quality precision instruments for which the performance of the resistors is the most important requirement, to resistors for which price is the most important factor. Capacitors perform energy storage, frequency control, timing and filtering functions in most types of electronic equip- ment. The more important applications for capacitors are (i) electronic filtering for linear and switching power supplies, (ii) decoupling and bypass of electronic signals or integrated circuits and circuit boards, and (iii) frequency control, timing and conditioning of electronic signals for a broad range of applica- tions. The Company's capacitor products primarily consist of solid tantalum chip capacitors, solid tantalum leaded capacitors, wet/foil tantalum capacitors and film capacitors. The tantalum capacitor is the smallest and most stable type of capacitor for its range of capacitance. Markets The Company's products are sold primarily to other manufacturers and, to a much lesser extent, to United States and foreign government agencies. Its products are used in, among other things, the circuitry of measuring instruments, industrial equip- ment, automotive applications including engine controls and fuel injection systems, process control systems, computer-related products, telecommunications, military and aerospace applications, medical instruments and scales. Approximately 41% of the Company's net sales for the year ended December 31, 1993 was attributable to sales to customers in the United States while the remainder was attributable to sales primarily in Europe. In the United States, products are marketed primarily through independent manufacturers' representatives (who are compensated solely on a commission basis), the Company's own sales personnel and independent distributors. The Company has regional sales personnel in several locations to provide technical and sales support for independent manufacturers' representatives throughout the United States, Mexico and Canada. In addition, the Company uses independent distributors to resell its products. Internationally, products are sold to customers in Germany, the United Kingdom, France, Israel, Japan, Singapore, South Korea and other European and Pacific Rim countries through Company sales offices, independent manufacturers' representatives and distributors. The Company endeavors to have its products incorporated into the design of electronic equipment at the research and proto- type stages. Vishay employs its own staff of application and field engineers who work with its customers, independent manufacturers' representatives and distributors to solve technical problems and develop products to meet specific needs. One of the fastest growing markets for passive electronic components is for surface mounted devices. These devices adhere to the surface of a circuit board rather than being secured by leads that pass through holes to the back side of the board. Surface mounting provides certain advantages over through-hole mounting, including the ability to place more components on a circuit board. The Company believes it has taken advantage of the growth of the surface mount market and is an industry leader in designing and marketing surface mount devices. The Company offers a wide range of these devices, including both thick and thin film resistor chips and networks, capacitors, inductors, oscillators, transformers and potentiometers, as well as a number of component packaging styles to facilitate automated product assembly by its customers. Sales of the Company's products to manufacturers in defense-related industries have continued to decline over the past year, primarily as a result of reduced governmental procurements of defense-related products. The Company has qualified certain products under various military specifications, approved and monitored by the United States Defense Electronic Supply Center ("DESC"), and under certain European military specifications. Classification levels have been established by DESC based upon the rate of failure of products to meet specifications (the "Classifi- cation Level"). In order to maintain the Classification Level of a product, tests must be continuously performed, and the results of these tests must be reported to DESC. If the product fails to meet the requirements for the applicable Classification Level, the product's classification may be reduced to a less stringent level. In that event, the Company's product may not qualify for use as a component in other products required to meet a more stringent Classification Level, although the Company's product may still be sold for use in other products requiring a less stringent classifi- cation. After completion of additional retesting, however, the product may again be classified at its original level. Sales of the product may be adversely affected pending the completion of any such additional retesting and the resumption of the original Classification Level. Various United States manufacturing facili- ties from time to time experience a product Classification Level modification. During the time that such level is modified for any specific product, net sales and earnings derived from such product may be adversely affected. The Company is undertaking to have the quality systems at all of its major manufacturing facilities approved under the established ISO 9000 international quality control standard. ISO 9000 is a comprehensive set of quality program standards developed by the International Standards Organization. Several of the Company's manufacturing operations have already received ISO 9000 approval and others are actively pursuing such approval. Vishay's largest customers vary from year to year, and no customer has long-term commitments to purchase products of the Company. No customer accounted for more than 10% of the Company's sales for the year ended December 31, 1993. Research and Development The Company maintains separate research and development staffs and promotes separate programs at a number of its production facilities to develop new products and new applications of existing products, and to improve product and manufacturing techniques. This decentralized system encourages individual product development and, from time to time, developments at one manufacturing facility will have applications at another facility. Most of the Company's products and manufacturing processes have been invented, designed and developed by Company engineers and scientists. Company research and development costs were approximately $7.1 million for 1993, $7.1 million for 1992 and $7.0 million for 1991. The Company spends additional amounts for the development of machinery and equipment for new processes and for cost reduction measures. See "Competition". Sources of Supplies Although most materials incorporated in the Company's products are available from a number of sources, certain materials (particularly tantalum) are available only from a limited number of suppliers. In order to protect itself from manufacturing disruptions due to potential supply shortages, the Company maintains a supply of certain critical materials, the nondelivery of which could have a materially adverse effect on the Company. Tantalum metal is the principal material used in the manufacture of tantalum capacitor products. Tantalum is purchased in powder form, primarily under annual contracts with domestic suppliers, at prices that are subject to periodic adjustment. The Company is a major consumer of the world's annual tantalum production. Tantalum, and other required raw materials have generally been available in sufficient quantities, but have been subject to wide price variations. Disruptions in the supply of, or substantial increases in the price of, tantalum metal could have a materially adverse effect on the Company. Inventory and Backlog Although Vishay manufactures standardized products, a substantial portion of its products are produced to meet specific customer specifications. The Company does, however, maintain an inventory of resistors and other components. Backlog of outstand- ing orders for the Company's products was $198.4 million, $134.3 million and $104.5 million, at December 31, 1993, 1992 and 1991, respectively. The increase in backlog at December 31, 1993 and 1992, as compared with prior periods, is attributable to the acquisitions of Roederstein and Sprague, respectively. The current backlog is expected to be filled during the next 12 months. Most of the orders in the Company's backlog may be cancelled by its customers, in whole or in part, although sometimes subject to penalty. To date, however, cancellations have not represented a material portion of the backlog. Competition The Company faces strong competition in its various product lines from both domestic and foreign manufacturers that produce products using technologies similar to those of the Company. Certain of the Company's products compete on the basis of its marketing and distribution network, which provides a high level of customer service, such as design assistance, order expediting and prompt delivery. In addition, the Company's competitive position depends on its product quality, know-how, proprietary data, marketing and service capabilities, business reputation and price. A number of the Company's customers are contractors or subcontractors on various United States and foreign government contracts. Under certain United States Government contracts, retroactive adjustments can be made to contract prices affecting the profit margin on such contracts. The Company believes that its profits are not excessive and, accordingly, no provision has been made for any such adjustment. In several areas the Company strengthens its market position by conducting seminars and educational programs for customers and for potential customers. Although the Company has numerous United States and foreign patents covering certain of its products and manufacturing processes, and acquired various patents with the acquisition of the STI tantalum capacitor and network lines, no particular patent is considered material to the business of the Company. Manufacturing Operations The Company conducts manufacturing operations in three principal geographic regions: the United States, Europe and Israel. At December 31, 1993, approximately 40% of the Company's identifiable assets were located in the United States, approximately 50% were located in Europe, approximately 9% were located in Israel and 1% in other regions. In the United States, the Company's main manufacturing facilities are located in Nebraska, South Dakota, North Carolina, Pennsylvania and Maine. In Europe, the Company's main manufacturing facilities are located in Selb and Landshut, Germany and Nice and Tours, France. In Israel, manufacturing facilities are located in Holon and Dimona. The Company also maintains manufacturing facilities in Juarez, Mexico and Toronto, Canada. For the year ended December 31, 1993, sales of products manufactured in Israel accounted for approximately 8% of the Company's net sales. The Company conducts manufacturing operations in Israel in order to take advantage of the relatively low wage rates in Israel and several incentive programs instituted by the Government of Israel, including certain tax abatements. These programs have contributed substantially to the growth and profitability of the Company. The Company may be materially and adversely affected if these incentive programs were no longer available to the Company or if hostilities were to occur in the Middle East that materially interfere with the Company's operations in Israel. Due to a shift in manufacturing emphasis, resulting from the growing market for surface mount devices, over-capacity at a number of the Company's manufacturing facilities and the relocation of some production to regions with lower labor costs, portions of the Company's work force and certain facilities may not be fully utilized in the future. As a result, the Company may incur significant costs in connection with work force reductions and the closing of additional manufacturing facilities. Environment The Company's manufacturing operations are subject to various federal, state and local laws restricting discharge of materials into the environment. The Company is not involved in any pending or threatened proceedings which would require curtailment of its operations at this time. However, the Company is involved in various legal actions concerning state government enforcement proceedings and various dump site clean-ups. These actions may result in fines and/or clean-up expenses. The Company believes that any fine and/or clean-up expense, if imposed, would not be material. The Company continually expends funds to ensure that its facilities comply with applicable environmental regulations. The Company has nearly completed its undertaking to comply with new environmental regulations, relating to the elimination of chlorofluorocarbons (CFCs) and ozone depleting substances (ODS), and other anticipated compliances with the Clean Air Act amendments of 1990. The Company anticipates that it will undertake capital expenditures of approximately $1,000,000 in fiscal 1994 for general environmental enhancement programs. Employees As of December 31, 1993, the Company employed approximately 14,200 full time employees of whom approximately 8,600 were located outside the United States. The Company hires few employees on a part time basis. While many of the Company's foreign employees are members of trade unions, none of the Company's employees located in the United States are represented by unions except for approximately 172 employees at the North Adams, Massachusetts facility acquired from STI, who are represented by three unions. The Company is currently negotiating the collective bargaining agreements of such domestic employees with each of these unions. The Company believes that its relationship with its employees is excellent. Item 2.	Item 2. PROPERTIES - - - ------- ---------- The Company maintains 53 manufacturing facilities. The principal locations of such facilities, along with available space including administrative offices, are: Approx. Available Owned Locations Space (Square Feet) - - - --------------- ------------------- United States ------------- Malvern and Bradford, PA 223,000 Columbus and Norfolk, NE 336,000 Wendell and Statesville, NC 193,000 Sanford, ME 212,000 Foreign ------- Germany (11 locations) 1,375,000 France (11 locations) 606,000 Israel (2 locations) 400,000 Portugal 100,000 Vishay owns an additional 239,000 square feet of manufac- turing facilities located in Colorado, Maryland, South Dakota and Florida. Available leased facilities in the United States include 420,000 square feet of space located in New York, California, New Jersey, South Dakota, Texas, Massachusetts and New Hampshire. Foreign leased facilities consist of 206,000 square feet in Mexico, 151,000 square feet in France, 130,000 square feet in England, 109,000 square feet in Canada and 98,000 square feet in Germany. The Company also has facilities in Japan, Austria, Switzerland, and the Czech Republic. In September 1993, Vishay entered into negotiations to build an additional manufacturing facility in Israel. The facility, which will be approximately 200,000 square feet, will be located near Haifa. Management believes it has sufficient manufacturing space for its current business. Item 3.	Item 3. LEGAL PROCEEDINGS - - - ------- ----------------- The Company, from time to time, is involved in routine litigation incidental to its business. Management believes that such matters, either individually or in the aggregate, should not have a materially adverse effect on the Company's business or financial condition. Item 4.	Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS - - - ------- --------------------------------------------------- During the fourth quarter of the fiscal year covered by this report, no matter was submitted to a vote of security holders of the Company. Item 4A. EXECUTIVE OFFICERS OF THE REGISTRANT - - - -------- ------------------------------------ The following table sets forth certain information regarding the executive officers of the Company as of March 25, 1994. Name Age Positions Held - - - ---- --- -------------- Felix Zandman* 65 Chairman of the Board, President, Chief Executive Officer and Director Robert A. Freece* 53 Vice President, Treasurer, Chief Financial Officer and Director Henry V. Landau 47 Vice President; President -- Measurements Group, Inc. Moshe Shamir 70 Vice President; President -- Vishay Israel Limited William J. Spires 52 Vice President and Secretary Donald G. Alfson 48 Vice President, Director; President -- Vishay Electronic Components, U.S. and Asia and President -- Dale Electronics, Inc. Gerald Paul 45 Vice President, Director; President -- Vishay Electronic Components, Europe and Managing Director -- Draloric Electronic GmbH. * Member of the Executive Committee of the Board of Directors. Felix Zandman, a founder of the Company, has been President, Chief Executive Officer and a Director of the Company since its inception. Dr. Zandman has been Chairman of the Board since March 1989. Robert A. Freece has been Vice President, Treasurer, Chief Financial Officer and a Director of the Company since 1972. Henry V. Landau has been a Vice President of the Company since 1983. Mr. Landau has been the President and Chief Executive Officer of Measurements Group, Inc., a subsidiary of the Company, since July 1984. Mr. Landau was an Executive Vice President of Measurements Group, Inc. from 1981 to 1984 and has been employed by the Company since 1972. Moshe Shamir has been the President of Vishay Israel Limited since its inception in 1969. Mr. Shamir has been a Vice President of the Company since 1972. Mr. Shamir is also a member of the Board of Directors of Teva Pharmaceuticals Industries, Ltd. and Chairman of the Executive Committee thereof. William J. Spires has been a Vice President and Secretary of the Company since 1981. Mr. Spires has been Vice President - Industrial Relations since 1980 and has been employed by the Company since 1970. Donald G. Alfson has been a Vice President since May 1993, a Director of the Company since May 1992 and the President of Vishay Electronic Components U.S. and Asia, and President of Dale Electronics, Inc. since April 1992. Mr. Alfson has been employed by the Company since 1972. Gerald Paul has been a Vice President and a Director of the Company since May 1993 and President of Vishay Electronic Components, Europe since January 1994. Dr. Paul has been Managing Director of Draloric Electronic GmbH since January 1991. Dr. Paul has been employed by the Company since February 1978. PART II ------- Item 5.	Item 5. MARKET FOR REGISTRANT'S COMMON STOCK AND RELATED SECURITY - - - ------- HOLDER MATTERS --------------------------------------------------------- The Company's Common Stock is listed on the New York Stock Exchange under the symbol VSH. The following table sets forth the high and low sale prices for the Company's Common Stock as reported on the New York Stock Exchange Composite Tape for the quarterly periods within the 1993 and 1992 fiscal years indicated. Stock prices have been restated to reflect stock dividends. The Company does not currently pay cash dividends on its capital stock. Its policy is to retain earnings to support the growth of the Company's business and the Company does not intend to change this policy at the present time. In addition, the Company is restricted from paying cash dividends under the terms of the Company's revolving credit and term loan agreement (see Note 6 to the consolidated financial statements). Holders of record of the Company's Common Stock totalled approximately 1,441 at March 25, 1994. COMMON STOCK MARKET PRICES Calendar 1993 Calendar 1992 High Low High Low ------ ------ ------ ------ First Quarter $35.48 $27.38 $21.31 $14.74 Second Quarter 36.25 25.48 24.29 18.59 Third Quarter 37.75 31.63 26.67 22.03 Fourth Quarter 35.38 28.75 35.48 25.36 On October 1, 1990, the Company commenced a stock repur- chase program pursuant to which the Company was authorized to purchase up to $5 million worth of its Common Stock. The purchases of Common Stock by the Company under the repurchase program are made in open-market transactions, subject to the availability of stock in accordance with the rules of the Securities and Exchange Commission and at the discretion of management. As of December 31, 1990 the Company had repurchased 36,600 shares at an approximate cost of $459,000. No repurchases were made in 1991, 1992 or 1993. In addition at March 25, 1994, the Company had outstanding 3,590,232 shares of Class B Common Stock, par value $.10 per share (the "Class B Stock"), each of which entitles the holder to ten votes. The Class B Stock generally is not transferable and there is no market for those shares. The Class B Stock is convertible, at the option of the holder, into Common Stock on a share for share basis. Substantially all such Class B Stock is beneficially owned by Dr. Felix Zandman, Mr. Moshe Shamir and a revocable trust for the benefit of Mr. Alfred P. Slaner. Dr. Felix Zandman is an executive officer and director of the Company, and Mr. Shamir is a director. Mr. Slaner and his wife, Luella B. Slaner, are Trustees of the Slaner Trust, and accordingly, Mrs. Slaner, a Vishay director, may also be deemed beneficially to own such shares. Item 6.	Item 6. SELECTED FINANCIAL DATA - - - ------- ----------------------- The following table sets forth selected consolidated financial information of the Company for the fiscal years ended December 31, 1993, 1992, 1991, 1990 and 1989. This table should be read in conjunction with the Consolidated Financial Statements of the Company and the related notes thereto included elsewhere in this Form 10-K. - - - --------------- (1) Includes the results from January 1, 1993 of the Roederstein acquisition. (2) Includes the results from January 1, 1992 of the businesses acquired from STI. Item 7.	Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL - - - ------- CONDITION AND RESULTS OF OPERATIONS ------------------------------------------------- Introduction and Background The Company's sales and net income have increased significantly in the past several years primarily as a result of its acquisitions. Following each acquisition, the Company implemented programs to take advantage of distribution and operating synergies among its businesses. This implementation is reflected in an increase in the Company's sales and in the decline in selling, general and administrative expenses as a percentage of the Company's sales. Since mid-1990, sales of most of the Company's products have been adversely affected by the worldwide slowdown in the electronic components industry. In addition, sales to defense-related industries have declined since the first quarter of 1991. These trends are continuing. Year ended December 31, 1993 compared to Year ended December 31, 1992 Results of Operations - - - --------------------- Net sales for the year ended December 31, 1993 increased by $192,046,000 over the comparable period of the prior year. The increase resulted from the acquisition of Roederstein, effective January 1, 1993. Net sales of Roederstein were $212,124,000 for the year ended December 31, 1993. Net sales, exclusive of Roederstein, decreased by $20,078,000, compared to the same period of the prior year. This decrease in net sales is attributable to the strengthening of the U.S. dollar against foreign currencies, which resulted in a decrease in reported Vishay sales of $15,671,000 for the year ended December 31, 1993, and recessionary pressures in Europe. Costs of products sold for the year ended December 31, 1993 were 77.5% of net sales as compared to 76.5% for the comparable period of the prior year. The reason for this increase is that the costs of products sold for Roederstein (prior to the full implementation of synergistic cost reductions) are approx- imately 80% of net sales, while Vishay's business, exclusive of Roederstein, has been operating in the 76% to 78% range. In 1993, grants of $3,424,000 received from the government of Israel, which were utilized to offset start-up costs of new facilities, were recognized as a reduction of costs of products sold. Selling, general, and administrative expenses for the year ended December 31, 1993 were 13.9% of net sales as compared to 15.3% for the comparable period of the prior year. The current year's lower rates reflect the effect of the acquisition of Roederstein and the ongoing cost savings programs implemented with the acquisition of certain businesses of STI during 1992. Restructuring charges of $6,659,000 for the year ended December 31, 1993 consist primarily of severance costs related to the Company's decision to downsize its European operations, primarily in France, as a result of the European business climate. Income from unusual items of $7,221,000 for the year ended December 31, 1993 represents proceeds received for business interruption insurance claims principally related to operations in Dimona, Israel. Interest costs increased by $1,514,000 for the year ended December 31, 1993 as a result of increased debt incurred for the acquisition of Roederstein. Other income for the year ended December 31, 1993 decreased by $4,410,000 over the comparable period of the prior year because other income for the year ended December 31, 1992 included consulting fees of $2,307,000 from Roederstein. These fees to Vishay were for time and expenses of Vishay personnel utilized by Roederstein in its attempt to restructure itself. Also, other income for the year ended December 31, 1992 included fees of approximately $3,325,000 from STI under one-year sales and distribution agreements. Foreign currency losses for the year ended December 31, 1993 were $1,382,000, as compared to foreign currency losses of $1,594,000 for the year ended December 31, 1992. The effective tax rate of 16.2% for the year ended December 31, 1993 reflects the non-taxability of certain insurance recoveries. The 1993 rate was also affected by increased manufacturing in Israel, where the Company's average income tax rate was approximately 4% in 1993. The effective tax rate for the year ended December 31, 1993, exclusive of the effect of the non- taxable insurance proceeds, was 18.6%. The effective tax rate for the year ended December 31, 1992 was 19.8%. Accounting Changes - - - ------------------ Effective January 1, 1993, the Company changed its method of accounting for income taxes from the deferred method to the liability method required by FASB Statement No. 109, "Accounting for Income Taxes". The cumulative effect of adopting Statement 109 as of January 1, 1993 was to increase net income by $1,427,000. Application of the new income tax rules also decreased pretax earnings by $2,870,000 for the year ended December 31, 1993 because of increased depreciation expense as a result of Statement 109's requirement to report assets acquired in prior business combinations at their pretax amounts. The Company also adopted FASB Statement No. 106, "Employers' Accounting for Postretirement Benefits Other Than Pensions", effective January 1, 1993. The Company has elected to recognize the transition obligation on a prospective basis over a twenty-year period. In 1993, the new standard resulted in additional annual net periodic postretirement benefit costs of $1,200,000 before taxes, and $792,000 after taxes, or $0.04 per share. Prior-year financial statements have not been restated to apply the new standard. Year ended December 31, 1992 compared to Year ended December 31, 1991 Net sales for the year ended December 31, 1992 increased $221,943,000 over the comparable period of the prior year. The increase was the result of the inclusion of the businesses acquired from STI effective as of January 1, 1992. Net sales of the acquired businesses were $230,492,000 for the year ended December 31, 1992. For the year ended December 31, 1992, net sales, exclusive of the acquired businesses, decreased by $8,549,000 compared to the same period of the prior year when recessionary pressures affecting sales were not as great. The weakening of the U.S. dollar against foreign currencies resulted in an increase in reported Vishay sales of $10,418,000 for the year ended December 31, 1992. Costs of products sold for the year ended December 31, 1992 were 76.5% of net sales as compared to 71.9% for the comparable period of the prior year. The reason for this increase is that the costs of products sold for the newly purchased businesses from STI (prior to any synergistic cost reductions) are 80% of net sales, while Vishay's resistor businesses traditionally operate at levels of 70% to 75%. Selling, general, and administrative expenses for the year ended December 31, 1992 were 15.3% of net sales compared to 17.2% for the comparable period of the prior year. The 15.3% rate reflects the effect of the businesses acquired from STI. The rate applicable to the businesses acquired from STI (approximately 11%) includes the effects of initial cost saving programs installed subsequent to the acquisition. For the year ended December 31, 1992, selling, general and administrative expenses of the Vishay resistor business (approximately 17%) were comparable to the levels experienced in the prior year. Interest costs increased by $3,903,000 for the year ended December 31, 1992 as a result of the increased debt incurred for the purchase of the businesses from STI. Other income for the year ended December 31, 1992 includes consulting fees of $2,307,000 from Roederstein. Other income for the year ended December 31, 1992 also includes fees of approxi- mately $3,325,000 from STI under one-year sales and distribution agreements expiring February 14, 1993, which were entered into in connection with the acquisition of the businesses from STI. The effective tax rate was 19.8% for the year ended December 31, 1992. The effective rate is comparable to the rate of 23.3% for 1991. The 1992 rate was in part affected by increased manufacturing in Israel where the Company's average income tax rate was 7% for 1992. Year ended December 31, 1991 compared to Year ended December 31, 1990 Net sales decreased by $3,313,000 or approximately 1% to $442,283,000 for the year ended December 31, 1991 from $445,596,000 for the year ended December 31, 1990. Sales increased in the United States by 2.7% as a result of acquisitions, which partially offset the effect of the worldwide recession. Sales in Western Europe declined 4.9% compared to the year ended December 31, 1990 as a result of the recession and the strengthening of the dollar against foreign currencies. Price increases did not materially affect sales. Costs of products sold increased to $318,166,000 or 71.9% of sales for the year ended December 31, 1991 from $312,925,000 or 70.2% of sales for the year ended December 31, 1990. The increase in costs of products sold as a percentage of sales reflects increased production costs of relatively flat sales in addition to certain manufacturing inefficiencies during the latter part of 1991. Selling, general, and administrative expenses decreased to $75,973,000 or 17.2% of sales for the year ended December 31, 1991 from $77,740,000 or 17.4% of sales for the year ended December 31, 1990 primarily because of the continuation of cost reduction programs introduced during 1990. Expenses of approximately $3,700,000 for layoff costs at the Company's European subsidiaries were incurred during the latter half of 1991. This correction to the work force was made to strengthen the subsidiaries' ability to attain earnings goals and to respond to the current recession. Interest expense decreased by $4,219,000 to $15,207,000 for the year ended December 31, 1991 from $19,426,000 for the year ended December 31, 1990 primarily as a result of payments made on long-term debt and lower interest rates. Other expenses for the year ended December 31, 1991 were $289,000 compared to income of $2,344,000 for the year ended December 31, 1990, primarily due to decreases in investment grants from Israel and interest income. Investment grants and interest income for the year ended December 31, 1991 were $106,000 and $797,000, respectively, compared to $980,000 and $2,257,000, respectively, for the year ended December 31, 1990. The effective tax rate for the year ended December 31, 1991 was 23.3% versus 31.5% for the year ended December 31, 1990. The decrease in the effective tax rate resulted from a reduced tax rate for certain Israeli operations and an increase in the propor- tion of earnings taxable in Israel. The lower rate was primarily due to tax advantages of doing business in Israel where the Company's effective average tax rate was approximately 10% at that time. Financial Condition Cash flows from operations were $50,114,000 for the year ended December 31, 1993 compared to $54,357,000 for the prior year and were used primarily to finance capital expenditures. Purchases of property and equipment were $76,813,000 for the year ended December 31, 1993 compared to $49,801,000 for the prior year primarily due to additions of manufacturing equipment for surface mount products and expansion of manufacturing facilities in Israel. The Company's financial condition at December 31, 1993 is strong with the Company's current ratio of 2.1 to 1. The Company's ratio of long-term debt to stockholders' equity was .7 to 1 at December 31, 1993 as compared to .4 to 1 at December 31, 1992. The increase in this ratio resulted from additional borrowings in connection with the acquisition of Roederstein. In connection with the Roederstein acquisition, Vishay entered into a DM 104,316,000 term loan agreement with its lending banks in January 1993. In addition, an Israeli subsidiary of Vishay borrowed $20 million pursuant to an unsecured credit agreement. The funds from the credit facilities were used in connection with the Roederstein acquisition and the refinancing of Roederstein's debt. Vishay and the Banks also amended certain terms of the outstanding $170,000,000 Revolving Credit and Term Loan Agreement dated as of January 10, 1992 among Vishay and the Banks and the Amended and Restated DM 42,375,000 Revolving Credit and DM 57,036,000 Term Loan Agreement dated as of January 10, 1992 among Vishay, Draloric and the lending banks in order to, among other things, allow Vishay to draw upon its revolving credit facilities to refinance a portion of Roederstein's debt. See Note 6 to the Company's Consolidated Financial Statements elsewhere herein for additional information with respect to Vishay's loan agreements, long-term debt and available short- term credit lines. Management believes that available sources of credit, together with cash expected to be generated from operations, will be sufficient to satisfy the Company's anticipated financing needs for working capital and capital expenditures during the next twelve months. Inflation Normally, inflation has not had a significant impact on the Company's operations. The Company's products are not generally sold on long-term contracts. Consequently, selling prices, to the extent permitted by competition, can be adjusted to reflect cost increases caused by inflation. Item 8.	Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA - - - ------- ------------------------------------------- The following Consolidated Financial Statements of the Company and its subsidiaries, together with the report of independent auditors thereon, are presented under Item 14 of this report: Report of Independent Auditors Consolidated Balance Sheets -- December 31, 1993 and 1992. Consolidated Statements of Operations -- for the years ended December 31, 1993, 1992 and 1991. Consolidated Statements of Cash Flows -- for the years ended December 31, 1993, 1992 and 1991. Consolidated Statements of Stockholders' Equity -- for the years ended December 31, 1993, 1992 and 1991. Notes to Consolidated Financial Statements -- December 31, 1993. Item 9.	Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON - - - ------- ACCOUNTING AND FINANCIAL DISCLOSURE ------------------------------------------------ None. PART III -------- Information with respect to Items 10, 11, 12 and 13 on Form 10-K is set forth in the Company's definitive proxy statement, which will be filed within 120 days of December 31, 1993, the Company's most recent fiscal year. Such information is incor- porated herein by reference, except that information with respect to Executive Officers of Registrant is set forth in Part I, Item 4A hereof under the caption, "Executive Officers of the Registrant". PART IV ------- Item 14.					Item 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON - - - -------- FORM 8-K ------------------------------------------------------ (a) (1) All Consolidated Financial Statements of the Company and its subsidiaries for the year ended December 31, 1993 are filed herewith. See Item 8 of this Report for a list of such financial statements. (2) Financial Statement Schedules for Vishay, set forth immediately following this Item 14 are as follows: Schedule V -- Property, Plant and Equipment Schedule VI -- Accumulated Depreciation, Depletion and Amortization of Property, Plant and Equipment Schedule IX -- Short-Term Borrowings Schedule X -- Supplementary Income Statement Information All other schedules for which provision is made in the applicable accounting regulation of the Securities and Exchange Commission are not required under the related instruction or are inapplicable and therefore have been omitted. (3) Exhibits -- See response to paragraph (c) below. (b) Reports on Form 8-K None (c) Exhibits: 2.1 Purchase and Sale Agreement, dated as of November 14, 1991, among Sprague Technologies, Inc., Sprague Electric Company and Vishay Intertechnology, Inc. Incorporated by reference to Exhibit 1 to the Current Report on Form 8-K dated November 14, 1991. 3.1 Certificate of Incorporation of Registrant, as amended and Certificate of Amendment of Restated Certificate of Incorporation of Registrant dated May 18, 1993. 3.2 Amended and Restated Bylaws of Registrant. Incorporated by reference to Exhibit 3.2 to Registration Statement No. 33-13833 of Registrant on Form S-2 under the Securities Act of 1933 (the "Form S-2") and Amendment No. 1 to Amended and Restated Bylaws of Registrant. 10.1 Performance-Based Compensation Plan for Chief Executive Officer of Registrant. 10.2 Second Amendment dated as of January 29, 1993 to Amended and Restated Vishay Intertechnology, Inc. $170,000,000 Revolving Credit and Term Loan Agreement by and among Comerica Bank, NationsBank of North Carolina, N.A., Signet Bank Maryland, CoreStates Bank, N.A., Bank Hapoalim, B.M., Meridian Bank, Bank Leumi le-Israel, B.M., Berliner Handels-und Frankfurter Bank and ABN AMRO Bank N.V. (collectively, the "Banks"), Comerica Bank, as agent for the Banks (the "Agent"), and Vishay Intertechnology, Inc. ("Vishay"), dated as of January 10, 1992. Incorporated by reference to Exhibit (10.1) to the Current Report on Form 8-K, dated January 29, 1993. 10.3 Second Amendment dated as of January 29, 1993 to Amended and Restated Draloric Electronic GmbH DM 42,375,000 Revolving Credit and DM 57,036,000 Term Loan Agreement by and among the Banks, the Agent and Draloric Electronic GmbH ("Draloric"), dated as of January 10, 1992. Incorporated by reference to Exhibit (10.2) to the Current Report on Form 8-K, dated January 29, 1993. 10.4 Roederstein DM 104,315,990.20 Term Loan Agreement dated as of January 29, 1993 by and among the Banks, the Agent, Draloric and Vishay. Incorporated by reference to Exhibit (10.3) to the Current Report on Form 8-K, dated January 29, 1993. 10.5 Agreement between First International Bank of Israel and Vishay Israel Ltd. dated January 28, 1993. Incorporated by reference to Exhibit (10.4) to the Current Report on Form 8-K, dated January 29, 1993. 10.6 Amended and Restated Vishay Intertechnology, Inc. $170,000,000 Revolving, Credit and Term Loan Agreement by and among Manufacturers Bank, N.A., NationsBank of North Carolina, N.A., Signet Bank Maryland, CoreStates Bank, N.A., Bank Hapoalim, B.M., Meridian Bank and Bank Leumi le-Israel, B.M. (collectively, the "Prior Banks"), the Agent and Vishay, dated as of January 10, 1992. Incorporated by reference to Exhibit (10.1) to the Current Report on Form 8-K, dated January 10, 1992. 10.7 Amended and Restated Draloric Electronic, GmbH DM 42,375,000 Revolving Credit and DM 57,036,000 Term Loan Agreement by and among the Prior Banks, the Agent and Draloric, dated as of January 10, 1992. Incorporated by reference to Exhibit (10.2) to the Current Report on Form 8-K, dated January 10, 1992. 10.8 Amended and Restated Guaranty by Vishay to the Banks, dated as of January 29, 1993. Incorporated by reference to Exhibit (10.5) to the Current Report on Form 8-K, dated January 29, 1993. 10.9 Amended and Restated Guaranty by Dale Holdings, Inc., Dale Electronics, Inc., Bradford Electronics, Inc., and Measurements Group, Inc. to the Banks, dated as of January 29, 1993. Incorporated by reference to Exhibit (10.6) to the Current Report on Form 8-K, dated January 29, 1993. 10.10 Amended and Restated Permitted Borrowers Guaranty by Vilna Equities Holding B.V., Visra Electronics Financing, B.V., Draloric, E-Sil Components, Ltd., Vishay Components (U.K.) Limited, Sfernice, S.A., Ultronix, Inc., Techno Components Corporation and Ohmtek, Inc. to the Banks, dated as of January 29, 1993. Incorporated by reference to Exhibit (10.7) to the Current Report on Form 8-K, dated January 29, 1993. 10.11 Guaranty by Vishay Sprague, Inc., Sprague North Adams, Sprague Sanford and Roederstein Electronics, Inc. to the Banks, dated January 29, 1993. Incorporated by reference to Exhibit (10.8) to the Current Report on Form 8-K, dated January 29, 1993. 10.12 Guaranty Agreement, dated as of November 29, 1989 between the Company and Societe Generale, New York Branch. Incorporated by reference to Exhibit 10.3 to the Company's Annual Report on Form 10-K for December 31, 1989. 10.13 Option Agreement for the Assets of the Resista Division of Roederstein by and among Vishay, Mr. Jorg Roederstein, Roederstein Spezialfabriken fur Bauelemente der Elektronik und Kondensatoren der Starkstromtechnik GmbH ("Roederstein") and Mr. Till Roederstein, dated February 18, 1992. Incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K, dated February 18, 1992. 10.14 Purchase and Transfer Agreement concerning Shares by and among, Mrs. Ute Roederstein, Mrs. Cornelia Bodinka, nee Roederstein, Ms. Claudia Roederstein, Mr. Jorg Roederstein, Mr. Till Roederstein and Vishay dated February 18, 1992. Incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K, dated February 18, 1992. 10.15 Notarial Offer for a Purchase and Transfer Agreement concerning Shares by Mr. Till Roederstein and Vishay Intertechnology, Inc. dated February 18, 1992. Incorporated by reference to Exhibit 10.3 to the Current Report on Form 8-K, dated February 18, 1992. 10.16 Fiscal Agency Agreement, dated July 28, 1988, between the Company and Citibank, N.A. Incorporated by reference to Exhibit (10(i)) to the Current Report on Form 8-K, dated August 30, 1988. 10.17 Management Fee Agreement between Dale Holdings, Inc. and the Company, dated May 14, 1986. Incorporated by reference to Exhibit 10.15 to the Form S-2. 10.18 Employment Agreement, dated as of March 15, 1985, between the Company and Dr. Felix Zandman. Incorporated by reference to Exhibit 10.12 to the Form S-2. 10.19 1986 Employee Stock Plan of the Company. Incorporated by reference to Exhibit 4 to the Company's Registration Statement on Form S-8 (No. 33-7850). 10.20 1986 Employee Stock Plan of Dale Electronics, Inc. Incorporated by reference to Exhibit 4 to the Company's Registration Statement on Form S-8 (No. 33-7851). 10.21 Money Purchase Plan Agreement of Measurements Group, Inc. Incorporated by reference to Exhibit 10(a)(6) to Amendment No. 1 to the Company's Registration Statement on Form S-7 (No. 2-69970). 10.22 Distributor Agreement between Nytron Inductors and VSD, Inc. dated as of January 1, 1991. Incorporated by reference to the Company's Annual Report on Form 10-K for December 31, 1990. 10.23 Distribution Sales Agreement between Sprague Electric Company and Vishay Intertechnology, Inc., dated February 14, 1992. Incorporated by reference to Exhibit (10.1) to the Current Report on Form 8-K, dated February 14, 1992. 10.24 Sales Representation Agreement between Sprague Electric Company and Vishay Intertechnology, Inc. dated February 14, 1992. Incorporated by reference to Exhibit (10.2) to the Current Report on Form 8-K, dated February 14, 1992. 10.25 Agreement for Transfer of Computer Software License Administration Services Agreement between Sprague Electric Company and Vishay Intertechnology, Inc., dated February 14, 1992. Incorporated by reference to Exhibit (10.3) to the Current Report on Form 8-K, dated February 14, 1992. 10.26 Lease of Concord Facility, dated February 14, 1992. Incorporated by reference to Exhibit (10.4) to the Current Report on Form 8-K, dated February 14, 1992. 10.27 Sublease of Hudson Facility, dated February 14, 1992. Incorporated by reference to Exhibit (10.5) to the Current Report on Form 8-K, dated February 14, 1992. 10.28 Lease of El Paso Property, dated February 14, 1992. Incorporated by reference to Exhibit (10.6) to the Current Report on Form 8-K, dated February 14, 1992. 10.29 Non-Competition Agreement among Sprague Technologies, Inc., Sprague Electric Company and Vishay Inter- echnology, Inc., dated February 14, 1992. Incorporated by reference to Exhibit (10.7) to the Current Report on Form 8-K, dated February 14, 1992. 10.30 Agreement between Sprague Technologies, Inc. and Vishay Israel, Ltd., dated February 14, 1992. Incorporated by reference to Exhibit (10.8) to the Current Report on Form 8-K, dated February 14, 1992. 11. Statement regarding Computation of Per Share Earnings. 22. Subsidiaries of the Registrant. 23. Consent of Independent Auditors. Report of Independent Auditors Board of Directors and Stockholders Vishay Intertechnology, Inc. We have audited the accompanying consolidated balance sheets of Vishay Intertechnology, Inc. as of December 31, 1993 and 1992, and the related consolidated statements of operations, cash flows, and stockholders equity for each of the three years in the period ended December 31, 1993. Our audits also included the financial statement schedules listed in the Index at Item 14(a). These financial statements and schedules are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements and schedules based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of Vishay Intertechnology, Inc. at December 31, 1993 and 1992, and the consolidated results of its operations and its cash flows for each of the three years in the period ended December 31, 1993, in conformity with generally accepted accounting principles. Also, in our opinion, the related financial statement schedules, when considered in relation to the basic financial statements taken as a whole, present fairly in all material respects the information set forth therein. As discussed in the Notes to Consolidated Financial Statements, in 1993 the Company changed its methods of accounting for income taxes (Note 5) and postretirement benefits other than pensions (Note 10). /s/ ERNST & YOUNG Philadelphia, Pennsylvania February 10, 1994 except for Note 6, as to which the date is March 25, 1994 Vishay Intertechnology, Inc. Consolidated Balance Sheets (In thousands, except per share and share amounts) December 31 1993 1992 -------------------------- Assets Current assets: Cash and cash equivalents $ 10,931 $ 15,977 Accounts receivable, less allowances of $5,150 and $3,885 125,284 102,757 Inventories: Finished goods 85,783 50,874 Raw materials and work in process 138,872 99,901 Prepaid expenses and other current assets 33,365 18,192 -------------------------- Total current assets 394,235 287,701 Property and equipment--at cost: Land 33,791 12,917 Buildings and improvements 136,432 87,623 Machinery and equipment 398,885 288,527 -------------------------- 569,108 389,067 Less allowances for depreciation (149,004) (117,448) -------------------------- 420,104 271,619 Goodwill 118,286 74,872 Other assets 15,481 27,451 -------------------------- $948,106 $661,643 ========================== December 31 1993 1992 -------------------------- Liabilities and stockholders' equity Current liabilities: Notes payable to banks $ 22,695 $ 18,966 Trade accounts payable 48,404 42,727 Payroll and related expenses 28,942 23,124 Other accrued expenses 54,112 25,984 Income taxes 3,740 - Current portion of long-term debt 30,536 31,573 -------------------------- Total current liabilities 188,429 142,374 Long-term debt--less current portion 266,999 139,540 Deferred income taxes 26,080 9,786 Other liabilities 24,081 1,021 Accrued pension costs 66,014 22,297 Stockholders' equity: Preferred Stock, par value $1.00 a share: Authorized--1,000,000 shares; none issued Common Stock, par value $.10 a share: Authorized--35,000,000 shares; 17,639,081 and 16,795,234 shares outstanding after deducting 47,441 and 47,432 shares in treasury 1,763 1,679 Class B convertible Common Stock, par value $.10 a share: Authorized-- 15,000,000 shares; 3,590,232 and 3,419,385 shares outstanding after deducting 125,965 and 119,967 shares in treasury 359 342 Capital in excess of par value 288,980 253,446 Retained earnings 105,849 97,156 Foreign currency translation adjustment (13,109) (5,864) Unearned compensation (60) (134) Pension adjustment (7,279) - -------------------------- 376,503 346,625 -------------------------- $948,106 $661,643 ========================== See accompanying notes. Vishay Intertechnology, Inc. Consolidated Statements of Operations (In thousands, except per share and share amounts) Year ended December 31 1993 1992 1991 ------------------------------------------ Net sales $856,272 $664,226 $442,283 Costs of products sold 663,239 508,018 318,166 ------------------------------------------ Gross profit 193,033 156,208 124,117 Selling, general, and administrative expenses 118,906 101,327 75,973 Restructuring expense 6,659 - 3,700 Unusual items (7,221) - - ------------------------------------------ 74,689 54,881 44,444 Other income (expense): Interest expense (20,624) (19,110) (15,207) Amortization of goodwill (3,294) (2,380) (1,695) Other 123 4,533 (289) ------------------------------------------ (23,795) (16,957) (17,191) ------------------------------------------ Earnings before income taxes and cumulative effect of accounting change 50,894 37,924 27,253 Income taxes 8,246 7,511 6,363 ------------------------------------------ Earnings before cumulative effect of accounting change 42,648 30,413 20,890 Cumulative effect of accounting change for income taxes 1,427 - - ------------------------------------------ Net earnings $44,075 $30,413 $20,890 ========================================== Earnings per share: Before cumulative effect of accounting change $2.01 $1.71 $1.25 Accounting change for income taxes 0.07 - - ------------------------------------------ Net earnings $2.08 $1.71 $1.25 ========================================== Weighted average shares outstanding 21,228,000 19,366,000 16,649,000 ========================================== See accompanying notes. Vishay Intertechnology, Inc. Consolidated Statements of Cash Flows (In thousands) See accompanying notes. Vishay Intertechnology, Inc. Consolidated Statements of Stockholders' Equity (In thousands, except share amounts) See accompanying notes. Vishay Intertechnology, Inc. Notes to Consolidated Financial Statements December 31, 1993 1. Summary of Significant Accounting Policies Principles of Consolidation The consolidated financial statements of Vishay Intertechnology, Inc. include the accounts of the Company and its subsidiaries, after elimination of all significant intercompany transactions, accounts, and profits. Inventories Inventories are stated at the lower of cost, determined by the first-in, first-out method, or market. Depreciation Depreciation is computed principally by the straight-line method based upon the estimated useful lives of the assets. Depreciation of capital lease assets is included in total depreciation expense. Depreciation expense was $43,493,000, $30,995,000, and $23,706,000 for the years ended December 31, 1993, 1992, and 1991, respectively. Goodwill Goodwill, representing the excess of purchase price over net assets of businesses acquired, is being amortized on a straight-line basis over 40 years. Accumulated amortization amounted to $10,945,000 and $7,679,000 at December 31, 1993 and 1992, respectively. Cash Equivalents For purposes of the Statement of Cash Flows, the Company considers demand deposits and all highly liquid investments with maturities of three months or less when purchased to be cash equivalents. Research and Development Expenses The amount charged to expense aggregated $7,097,000, $7,149,000, and $6,967,000 for the years ended December 31, 1993, 1992, and 1991, respectively. The Company spends additional amounts for the development of machinery and equipment for new processes and for cost reduction measures. Grants Grants received from governments by certain foreign subsidiaries are recognized as income when conditions for receipt are met. In 1993, grants of $3,424,000 received from the government of Israel, which were utilized to offset startup costs of new facilities, were recognized as a reduction of costs of products sold. Vishay Intertechnology, Inc. Notes to Consolidated Financial Statements (continued) 1. Summary of Significant Accounting Policies (continued) Earnings Per Share Earnings per share is based on the weighted average number of common shares and dilutive common equivalent shares (from the assumed conversion of convertible subordinated debentures) outstanding during the period. In October 1992, the convertible subordinated debentures were converted into 2,536,783 shares of Common Stock. For the year ended December 31, 1992, where assumed conversion of the debentures has a dilutive effect, net earnings used in the computations are adjusted for interest expense, net of income taxes, on the convertible subordinated debentures. Earnings per share amounts for all periods presented reflect 5% stock dividends paid on June 11, 1993, June 16, 1992, and June 11, 1991. Earnings per share for the years ended December 31, 1993 and 1992 reflect the weighted effect of the issuance of 1,800,000 shares of Common Stock on December 24, 1992. Accounting Changes In 1993, the Company changed its methods of accounting for income taxes (Note 5) and postretirement benefits other than pensions (Note 10). Reclassifications Certain prior-year amounts have been reclassified to conform with the current presentation. 2. Acquisitions During January 1993, Vishay exercised its option to purchase the remaining 81% of the outstanding share capital of Roederstein GmbH, a passive electronic components manufacturer with headquarters in Germany for 4,050,000 Deutsche Marks ("DM") ($2,502,000) pursuant to an option agreement dated February 18, 1992. Vishay had acquired its initial 19% interest in Roederstein on February 18, 1992 for DM 950,000 ($577,000). In connection with the acquisition, Vishay refinanced all of Roederstein's existing bank debt of DM 160,381,000 ($99,062,000). Funds to refinance Roederstein's debt were provided by a DM 104,316,000 term loan with a group of banks, $20,000,000 borrowed under an unsecured credit agreement, and borrowings under an existing line of credit. Effective January 1, 1992, the Company acquired the worldwide tantalum capacitor and U.S. thick film resistor network businesses of Sprague Technologies, Inc. Under the terms of the purchase agreement, Vishay paid $127,000,000 cash, transferred to Sprague real property with a fair value of $4,771,000, and assumed certain liabilities relating to the businesses. Vishay also entered into certain ancillary agreements with the seller, including one-year sales and distribution agreements under which Vishay received fees of $3,325,000 during 1992, which are included in other income. The purchase price was funded primarily from a $125,000,000 term loan facility. Vishay Intertechnology, Inc. Notes to Consolidated Financial Statements (continued) 2. Acquisitions (continued) The acquisitions have been accounted for under the purchase method of accounting. The operating results of Roederstein and Sprague have been included in the Company's consolidated results of operations from January 1, 1993 and January 1, 1992, respectively. Excess of cost over the fair value of net assets acquired (Roederstein--$45,210,000; Sprague--$19,534,000) is being amortized on a straight-line basis over forty years. Had the Roederstein and Sprague acquisitions been made at the beginning of the year prior to their acquisition, the Company's pro forma unaudited results would have been (in thousands, except per share amounts): Year ended December 31 1992 1991 ------------------------- Net sales $913,398 $679,183 Net earnings (loss) (22,992) 20,591 Earnings (loss) per share $(1.19) $1.24 The unaudited pro forma results are not necessarily indicative of the results that would have been attained had the acquisitions occurred at the beginning of the periods presented or of results which may occur in the future. Pro forma net earnings for 1992 reflect $31,860,000 of restructuring costs incurred by Roederstein for work force reductions. During 1992, Vishay provided Roederstein with management and sales support, short-term working capital advances, and assistance in renegotiating Roederstein's bank debt. Vishay also assisted Roederstein in developing a cost-savings program involving reductions in the Roederstein work force, including the closing of an unprofitable division. Vishay recognized consulting fees, which are included in other income, from Roederstein of $2,307,000 for the year ended December 31, 1992 for its assistance to Roederstein. As of December 31, 1992, Vishay had investments in Roederstein of $3,229,000, advances to Roederstein, included in other assets, of $16,918,000, accounts receivable and other current receivables from Roederstein of $5,166,000, and accounts payable to Roederstein of $1,158,000. The Company made several minor acquisitions in 1993 and 1991, all of which were accounted for under the purchase method. The results of operations of these businesses have been included in the consolidated results of the Company from the dates of acquisition. 3. Restructuring Expense and Unusual Items Restructuring expenses of $6,659,000 for 1993 related to the downsizing of some of the Company's European operations. Income from unusual items of $7,221,000 for 1993 represents insurance recoveries the Company has received for business interruption insurance claims. The Company incurred restructuring costs of $3,700,000 in 1991 relating primarily to costs associated with layoffs in France. Vishay Intertechnology, Inc. Notes to Consolidated Financial Statements (continued) 4. Foreign Subsidiaries The following amounts relating to foreign subsidiaries are included in the consolidated financial statements (in thousands): 5. Income Taxes Effective January 1, 1993, the Company changed its method of accounting for income taxes from the deferred method to the liability method required by FASB Statement No. 109, "Accounting for Income Taxes." As permitted under the new rules, prior years' financial statements have not been restated. The cumulative effect of adopting Statement 109 as of January 1, 1993 was to increase net earnings by $1,427,000, or $.07 per share. For the year ended December 31, 1993, application of the new income tax rules decreased pretax income by $2,870,000 because of increased depreciation expense as a result of Statement 109's requirement to report assets acquired in prior business combinations at their pretax amounts. At December 31, 1993, the Company has net operating loss carryforwards for tax purposes of approximately $96,300,000 in Germany (no expiration date), $3,100,000 in France (expire December 31, 1998), and $1,800,000 in Portugal (expire December 31, 1997). Approximately $70,800,000 of the carryforward in Germany, and the full $1,800,000 in Portugal, resulted from the Company's acquisition of Roederstein. For financial reporting purposes, a valuation allowance of $34,862,000 has been recognized to offset deferred tax assets related to German net operating loss carryforwards. If tax benefits are recognized in the future through reductions of the valuation allowance, such amounts will reduce goodwill of acquired companies. The valuation allowance decreased from January 1, 1993 by $6,584,000 primarily due to a decrease in German tax rates which had the effect of reducing the deferred tax asset for German net operating loss carryforwards. Vishay Intertechnology, Inc. Notes to Consolidated Financial Statements (continued) 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 used for income tax purposes. Significant components of the Company's deferred tax liabilities and assets as of December 31, 1993 are as follows (in thousands): Deferred tax liabilities: Tax over book depreciation $57,401 Other--net 2,685 --------- Total deferred tax liabilities 60,086 --------- Deferred tax assets: Pension and other retiree obligations 20,179 Net operating loss carryforwards 38,773 Restructuring reserves 7,354 Other accruals and reserves 12,300 --------- Total deferred tax assets 78,606 Valuation allowance for deferred tax assets (34,862) --------- Net deferred tax assets 43,744 --------- Net deferred tax liabilities $16,342 ========= For financial reporting purposes, earnings before income taxes and cumulative effect of accounting change includes the following components (in thousands): Year ended December 31 1993 1992 1991 ---------------------------------- Pretax income: Domestic $13,136 $10,252 $8,519 Foreign 37,758 27,672 18,734 ---------------------------------- $50,894 $37,924 $27,253 ================================== Vishay Intertechnology, Inc. Notes to Consolidated Financial Statements (continued) 5. Income Taxes (continued) Significant components of income taxes attributable to continuing operations are as follows (in thousands): Liability Method Deferred Method -------------------------------- Year ended December 31 1993 1992 1991 -------------------------------- Current: U.S. Federal $3,032 $1,639 $3,558 Foreign 2,706 2,521 1,706 State 332 502 675 -------------------------------- 6,070 4,662 5,939 Deferred: U.S. Federal 1,960 1,760 103 Foreign 36 832 312 State 180 257 9 -------------------------------- 2,176 2,849 424 -------------------------------- $8,246 $7,511 $6,363 ================================ For the year ended December 31, 1992, deferred income taxes resulted from accelerated methods of depreciation used for tax purposes ($2,494,000) and restructuring reserves ($2,012,000). These amounts were partially offset by differences relating to inventory valuation methods ($900,000) and other items ($757,000). For the year ended December 31, 1991, deferred taxes resulted principally from use of accelerated methods of depreciation for tax purposes. A reconciliation of income tax at the U.S. federal statutory income tax rate to actual income tax expense is as follows (in thousands): Liability Method Deferred Method -------------------------------- Year ended December 31 1993 1992 1991 -------------------------------- Tax at statutory rate $17,304 $12,894 $9,266 State income taxes, net of federal tax 396 501 452 Effect of foreign income tax rates (10,532) (5,649) (5,166) Effect of purchase accounting adjustments 717 939 1,291 Other 361 (1,174) 520 -------------------------------- $8,246 $7,511 $6,363 ================================ Vishay Intertechnology, Inc. Notes to Consolidated Financial Statements (continued) 5. Income Taxes (continued) At December 31, 1993, no provision has been made for U.S. income taxes on approximately $169,678,000 of foreign earnings which are expected to be reinvested indefinitely. Income taxes paid were $6,933,000, $5,729,000 and $8,418,000 for the years ended December 31, 1993, 1992, and 1991, respectively. 6. Long-Term Debt Long-term debt consisted of the following (in thousands): December 31 1993 1992 ------------------------ Revolving Credit Loan $51,500 $7,500 Term Loan 102,500 117,500 Deutsche Mark Revolving Credit Loan 23,035 10,500 Deutsche Mark Term Loan 10,948 23,486 Deutsche Mark Term Loan II 60,073 - Unsecured Credit Agreements 38,638 - Industrial Development Revenue Bonds 578 2,581 French Industrial Bonds 3,147 1,952 Other Debt and Capital Lease Obligations 7,116 7,594 ------------------------ 297,535 171,113 Less current portion 30,536 31,573 ------------------------ $266,999 $139,540 ======================== As of December 31, 1993, five facilities were available under the Company's amended and restated Revolving Credit and Term Loan and Deutsche Mark Revolving Credit and Term Loan agreements with a group of banks; a multicurrency revolving credit loan (interest 4.25% at December 31, 1993), a U.S. term loan (interest 4.44% at December 31, 1993), a Deutsche Mark revolving credit loan (interest 7.50% at December 31, 1993), a Deutsche Mark term loan (interest 7.69% at December 31, 1993), and an additional Deutsche Mark term loan (interest 8.25% at December 31, 1993). During March 1994, the Company's bank group agreed to amend the Revolving Credit and Term Loan and Deutsche Mark Revolving Credit and Term Loan agreements in effect at December 31, 1993. The terms of the five facilities, as agreed in March 1994, are summarized below. The first facility is a $90,000,000 multicurrency revolving credit facility which is available to the Company on a revolving basis until December 31, 1996, at which time the Company may elect a term out option, with quarterly payments due beginning March 31, 1997 through December 31, 2000. Interest is payable at prime or at other interest rate options. The Company is required to pay a commitment fee equal to 3/8% per annum on the average unused line. The second facility is a $102,500,000 term loan, with interest payable at prime plus 1/8% or at other interest rate options. Principal payments are due as follows: 1994 -- $5,000,000; 1995--$10,000,000; 1996--$10,000,000; Vishay Intertechnology, Inc. Notes to Consolidated Financial Statements (continued) 6. Long-Term Debt (continued) 1997--$15,000,000; 1998--$20,000,000; 1999--$20,000,000; 2000--$22,500,000. Additional principal payments may be required based on excess cash flow as defined in the agreement. The loan agreements also provide a German subsidiary of the Company with three Deutsche Mark ("DM") facilities. The first DM facility is a DM 40,000,000 ($23,035,000) revolving credit facility which is available until December 31, 1996, at which time the Company may elect a term out option, with quarterly payments due beginning March 31, 1997 through December 31, 2000. Interest is based on DM market rates plus 15/16%. The Company is required to pay a commitment fee equal to 3/8% per annum on the average unused line. The second DM facility is a DM 19,012,000 ($10,948,000) term loan. Principal of DM 4,753,000 ($2,737,000) and interest at DM market rates plus 1-1/8% is due quarterly with final payment on December 31, 1994. The third DM facility is a DM 104,316,000 ($60,073,000) term loan. Interest is based on DM market rates plus 1-11/16%. Principal payments of DM 18,700,000, 34,100,000, 37,000,000, and 14,516,000 ($10,769,000, $19,637,000, $21,307,000, and $8,360,000) are due on or before December 31, 1994, 1995, 1996, and 1997, respectively. Additional principal payments may be required based on excess cash flow as defined in the agreement. Under the loan agreements, the Company is restricted from paying cash dividends and must comply with other covenants, including the maintenance of specific ratios. The Company is in compliance with the restrictions and limitations under the terms of loan agreements, as amended. All of the Company's U.S. assets and the stock of certain foreign subsidiaries are pledged as collateral under loan agreements. Borrowings under a $20,000,000 unsecured credit agreement with First International Bank of Israel are at LIBOR plus 1-1/8% (4.25% at December 31, 1993). Principal payments of $5,000,000, $6,666,666, and $8,333,334 are due on or before December 31, 1997, 1998, and 1999, respectively. Other unsecured borrowings are at various interest rates ranging from 3.9% to 7.2%. The industrial development revenue bonds are at various interest rates ranging from 8% to 12% and mature at various dates from 1996 through 1999. The French industrial bonds are payable in French francs and bear interest at rates ranging from zero to 10% and require periodic payments through 2004. Aggregate annual maturities of long-term debt, as revised to reflect the agreement reached with the Company's bank group in March 1994 and excluding payments which may be required based on excess cash flow, are as follows: 1994--$30,536,000; 1995--$32,132,000; 1996--$41,729,000; 1997--$50,393,000; 1998--$48,305,000; thereafter--$94,440,000. The Company has short-term credit lines with various banks aggregating $64,667,000, of which $29,030,000 was unused at December 31, 1993. Interest paid was $20,587,000, $16,496,000, and $12,775,000 for the years ended December 31, 1993, 1992, and 1991, respectively. Vishay Intertechnology, Inc. Notes to Consolidated Financial Statements (continued) 7. Stockholders' Equity The Company's Class B Stock carries ten votes per share while the Common Stock carries one 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 to Common Stock. Unearned compensation relating to Common Stock issued under employee stock plans is being amortized over a 36-month period. 132,153 shares are available for issuance under stock plans at December 31, 1993. 8. Other Income Other income (expense) consists of the following (in thousands): Year ended December 31 1993 1992 1991 --------------------------------------- Foreign exchange gains (losses) $(1,382) $(1,594) $41 Investment income 722 1,565 797 Sales and distribution fees from Sprague Technologies, Inc. - 3,325 - Roederstein consulting fees - 2,307 - Other 783 (1,070) (1,127) --------------------------------------- $123 $4,533 $(289) ======================================= 9. Employee Retirement Plans Two U.S. subsidiaries of Vishay, Dale Electronics, Inc. and Sprague North Adams, Inc., which was acquired effective January 1, 1992, maintain defined benefit pension plans (the "Plans"). Substantially all full-time employees of Dale and hourly employees of Sprague's North Adams facility are eligible to participate. The benefits under the Dale Plan are based on the employees' compensation during all years of participation. The benefits under the Sprague Plan are based on number of years of credited service. The Plans are tax qualified subject to the minimum funding requirements of ERISA. Employees participating in the Dale Plan are required to contribute an amount based on annual earnings. The Company's funding policy is to contribute annually amounts that satisfy the funding standard account requirements of ERISA. The assets of the Dale Plan are invested primarily in guaranteed investment contracts issued by an insurance company and mutual funds. The assets of the Sprague Plan are invested primarily in fixed income securities and common stock. Vishay Intertechnology, Inc. Notes to Consolidated Financial Statements (continued) 9. Employee Retirement Plans (continued) Net pension cost for the Plans included the following components (in thousands): The expected long-term rate of return on assets was 9.5%. The following table sets forth the funded status of the Plans and amounts recognized in the Company's financial statements (in thousands): The following assumptions have been used in the actuarial determinations of the Plans: 1993 1992 -------------------- Discount rate 7.5% 8.0%-8.5% Rate of increase in compensation levels 4.5% 4.5% Vishay Intertechnology, Inc. Notes to Consolidated Financial Statements (continued) 9. Employee Retirement Plans (continued) The Company's U.S. subsidiary, Measurements Group, Inc., maintains a defined contribution pension plan covering substantially all full-time employees. Contributions are made based on participants' compensation. Costs for this plan were $530,000, $512,000, and $485,000 for the years ended December 31, 1993, 1992, and 1991, respectively. In addition, many of the Company's U.S. employees are eligible to participate in 401(k) Savings Plans, some of which provide for Company matching under various formulas. The Company's matching expense for the plans was $1,996,000, $1,894,000, and $1,170,000 for the years ended December 31, 1993, 1992, and 1991, respectively. The Company provides pension and similar benefits to employees of certain foreign subsidiaries consistent with local practices. German subsidiaries of the Company (including Roederstein, which was acquired in January 1993) have noncontributory defined benefit pension plans covering management and employees. Pension benefits are based on years of service. Net pension cost for the German Plans included the following components (in thousands): The following table sets forth the funded status of the German Plans and amounts recognized in the Company's financial statements (in thousands): Vishay Intertechnology, Inc. Notes to Consolidated Financial Statements (continued) 9. Employee Retirement Plans (continued) The following assumptions have been used in the actuarial determinations of the German Plans: December 31 1993 1992 ------------------------ Discount rate 7.0% 6.0% Rate of increase in compensation levels 3.0% 4.0% 10. Postretirement Medical Benefits The Company pays limited health care premiums for certain eligible retired U.S. employees. Prior to 1993, the cost of these benefits, which was not significant, was charged to expense when the benefits were paid. Effective January 1, 1993, the Company adopted FASB Statement No. 106, "Employers' Accounting for Postretirement Benefits Other Than Pensions." Under this new standard, the Company recognizes the cost of postretirement benefits over the active service period of its employees. The Company elected to recognize the transition obligation, which represents the previously unrecognized prior service cost, on a prospective basis over a twenty-year period. In 1993, the new standard resulted in additional annual net periodic postretirement benefit cost of $1,200,000 before taxes and $792,000 after taxes, or $0.04 per share. Prior-year financial statements have not been restated to apply the new standard. Net postretirement benefit cost for the year ended December 31, 1993 included the following components (in thousands): Service cost $ 351 Interest cost 713 Net amortization and deferral 424 ------- Net postretirement benefit cost $ 1,488 ======= The cost information does not include the effects of Plan amendments made at the end of 1993, which are expected to reduce future costs. Cash payments for these benefits were $288,000 for 1993. The Company continues to fund postretirement medical benefits on a pay-as-you-go basis. The status of the plan and amounts recognized in the Company's consolidated balance sheet as of December 31, 1993 were as follows (in thousands): Accumulated postretirement benefit obligation: Retirees $(2,234) Actives eligible to retire (956) Other actives (3,028) ------------ Total (6,218) Unrecognized loss 955 Unrecognized transition obligation 4,063 ------------ Accrued postretirement benefit liability $(1,200) ============ The accumulated postretirement benefit obligation reflects Plan amendments made at the end of 1993 which capped employer contributions for each participant at the 1993 dollar amounts. The discount rate used in the calculation was 7.5%. Vishay Intertechnology, Inc. Notes to Consolidated Financial Statements (continued) 11. Leases Total rental expense under operating leases was $7,528,000, $9,577,000, and $4,435,000 for the years ended December 31, 1993, 1992, and 1991, respectively. Future minimum lease payments for operating leases with initial or remaining noncancelable lease terms in excess of one year are as follows: 1994-- $5,694,000; 1995--$4,226,000; 1996--$3,582,000; 1997--$2,947,000; 1998-- $2,602,000; thereafter--$7,492,000 12. Financial Instruments Financial instruments with potential credit risk consist principally of accounts receivable. Concentrations of credit risk with respect to receivables are limited due to the Company's large number of customers and their dispersion across many countries and industries. At December 31, 1993 and 1992, the Company had no significant concentrations of credit risk. The amounts reported in the balance sheet for cash and cash equivalents and for short-term and long-term debt approximate fair value. 13. Segment and Geographic Information Vishay operates in one line of business--the manufacture of electronic components. Information about the Company's operations in different geographic areas is as follows (in thousands): Vishay Intertechnology, Inc. Notes to Consolidated Financial Statements (continued) 13. Segment and Geographic Information (continued) * Includes export sales of $78,793, $63,606, and $34,282 for the years ended December 31, 1993, 1992, and 1991, respectively. Sales between geographic areas are priced to result in operating profit which approximates that earned on sales to unaffiliated customers. Operating profit is total revenue less operating expenses. In computing operating profit, general corporate expenses, interest expense, and income taxes were not deducted. Vishay Intertechnology, Inc. Notes to Consolidated Financial Statements (continued) 14. Summary of Quarterly Financial Information (Unaudited) Quarterly financial information for the years ended December 31, 1993 and 1992 is as follows: (1) Included in net earnngs for the first quarter of 1993 is a one-time tax benefit of $1,427 or $.07 per share resulting from the adoption of FASB Statement No. 109, "Accounting for Income Taxes". (2) Adjusted to give retroactive effect to 5% stock dividends in June 1993 and June 1992. Fourth quarter 1992 earnings reflect the difference between the Company's actual effective income tax rate of 19.8% and the estimated effective rate of 23.1% used through the third quarter. Vishay Intertechnology, Inc. Schedule V -- Property, Plant, and Equipment (In thousands) (1) $18,406 recorded for the adoption of Statement of Financial Accounting Standards No. 109, "Accounting for Income Taxes". Statement 109 requires assets acquired in prior business combinations to be reported at their pretax amounts. Offset principally by foreign currency translation adjustments. (2) $93,022 of the additions and $5,798 of the retirements relate to the Sprague acquisition. (3) $109,961 of the additions relate to the Roederstein acquisition. (4) Principally foreign currency translation adjustments. Vishay Intertechnology, Inc. Schedule VI -- Accumulated Depreciation, Depletion, and Amortization of Property, Plant, and Equipment (In thousands) (1) Principally foreign currency translation adjustments. (2) $1,026 of the retirements relates to the Sprague acquisition. Vishay Intertechnology, Inc. Schedule IX Short-Term Borrowings (In thousands, except percentages) (1) Notes payable to bank represent borrowings under lines of credit borrowing arrangements which have no termination date but are reviewed annually for renewal. (2) The average amount outstanding during the period was based on quarter ending balances. (3) The weighted average interest rate during the period was computed by dividing the actual interest expense by average short-term debt outstanding. Vishay Intertechnology, Inc. Schedule X -- Supplementary Income Statement Information (In thousands) COL. A COL. B - - - ----------------------------------------------------------------------------- ITEM Charged to Costs and Expenses - - - ----------------------------------------------------------------------------- Year ended December 31, 1993 1992 1991 ---------------------------------- Maintenance and repairs $23,177 $18,344 $12,131 Amounts for depreciation and amortization of intangible assets, taxes, other than payroll and income taxes, royalties, and advertising costs are not presented as such amounts are less than 1% of total sales and revenues. 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. March 30, 1994 /s/Felix Zandman ------------------------------------- Date Felix Zandman, Chairman of the Board, President, Chief Executive Officer & Director 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. /s/Robert A. Freece /s/Felix Zandman - - - -------------------------- ------------------------------ Robert A. Freece Felix Zandman, Chairman Director, Vice President, of the Board, Director, Treasurer and Chief President and Chief Financial Officer Executive Officer (Principal Financial and (Principal Executive Officer) Accounting Officer) /s/Luella B. Slaner /s/Avi D. Eden - - - -------------------------- ------------------------------ Luella B. Slaner, Director Avi D. Eden, Director /s/Edward B. Shils /s/Guy Brana - - - -------------------------- ------------------------------ Edward B. Shils, Director Guy Brana, Director /s/Donald Alfson /s/Jean-Claude Tine - - - -------------------------- ------------------------------ Donald Alfson, Director, Jean-Claude Tine, Director Vice President, President of Vishay Electronic Components, U.S. and Asia, and President of Dale Electronics, Inc. /s/Gerald Paul /s/Mark I. Solomon - - - -------------------------- ------------------------------ Gerald Paul, Director, Mark I. Solomon, Director Vice President, President of Vishay Electronic Components, Europe, and Managing Director of Draloric Electronic GmbH March 30, 1994 Date
100240_1993.txt	100240	1993	"ITEM 1. BUSINESS\nBACKGROUND\nTurner Broadcasting System, Inc. (the \"Company\") is a diversified i(...TRUNCATED)	"ITEM 2. PROPERTIES\nThe Company owns CNN Center, a hotel and office complex in Atlanta, Georgia, wh(...TRUNCATED)	"ITEM 3. LEGAL PROCEEDINGS\nLITIGATION\nStorer Cable Communications, et al. v. The City of Montgomer(...TRUNCATED)	"ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS\nBy unanimous written consent dated as (...TRUNCATED)	"ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS\nInformation regardin(...TRUNCATED)	"ITEM 6. SELECTED FINANCIAL DATA\nA summary of selected financial data for the Company for the five (...TRUNCATED)	"ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS\nThe (...TRUNCATED)	"ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA\nConsolidated financial statements and notes th(...TRUNCATED)	"ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE\nNone.(...TRUNCATED)	"ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT\nInformation relating to directors of t(...TRUNCATED)	"ITEM 11. EXECUTIVE COMPENSATION\nInformation regarding compensation of officers and directors of th(...TRUNCATED)	"ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT\nInformation regarding owne(...TRUNCATED)	"ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS\nInformation regarding certain relationship(...TRUNCATED)	"ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K\n(a)(1) Financial Statemen(...TRUNCATED)
58696_1993.txt	58696	1993	"Item 1. Business\n(a) General Development of Business.\nLennar Corporation (together with its subsi(...TRUNCATED)	"Item 2. Properties.\nFor information about properties owned by the Company for use in its residenti(...TRUNCATED)	"Item 3. Legal Proceedings.\nThe Company is a defendant in various lawsuits brought by condominium a(...TRUNCATED)	"Item 4. Submission of Matters to a Vote of Security Holders.\nNo matters were submitted to a vote o(...TRUNCATED)	"Item 5. Market for the Registrant's Common Stock and Related Security Holder Matters.\nThe Company'(...TRUNCATED)		"Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations\nRESU(...TRUNCATED)
46207_1993.txt	46207	1993	"ITEM 1. BUSINESS\nHEI\nHEI was incorporated in 1981 under the laws of the State of Hawaii and is a (...TRUNCATED)	"ITEM 2. PROPERTIES\nHEI leases 17,612 square feet of office space in downtown Honolulu. The leases (...TRUNCATED)	"ITEM 3. LEGAL PROCEEDINGS\nExcept as provided for below and in \"Item 1. Business,\" there are no k(...TRUNCATED)	"ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS\nHEI and HECO:\nDuring the fourth quart(...TRUNCATED)	"ITEM 5. MARKET FOR REGISTRANTS' COMMON EQUITY AND RELATED STOCKHOLDER MATTERS HEI:\nThe information(...TRUNCATED)	"ITEM 6. SELECTED FINANCIAL DATA\nHEI:\nThe information required by this item is incorporated herein(...TRUNCATED)	"ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS\nHEI:(...TRUNCATED)	"ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA\nHEI:\nThe information required by this item is(...TRUNCATED)	"ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE\nHEI A(...TRUNCATED)	"ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANTS\nHEI:\nThe following persons are, or m(...TRUNCATED)	"ITEM 11. EXECUTIVE COMPENSATION\nHEI:\nThe information required under this item for HEI is incorpor(...TRUNCATED)	"ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT\nHEI:\nThe information requ(...TRUNCATED)	"ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS\nHEI:\nThe information required under this (...TRUNCATED)	"ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K\n(a)(1) FINANCIAL STATEMEN(...TRUNCATED)
60041_1993.txt	60041	1993	"ITEM 1. BUSINESS\nGeneral Development of Business\nLoctite Corporation (the \"Company\") was organi(...TRUNCATED)	"ITEM 2. PROPERTIES\nThe Company owns and leases properties located around the world. These properti(...TRUNCATED)	"ITEM 3. LEGAL PROCEEDINGS\nThe Company and its subsidiaries are not a party to any pending legal pr(...TRUNCATED)	"ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS\nNo matters were submitted to a vote of(...TRUNCATED)	"ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS\nThe Company's Co(...TRUNCATED)	"ITEM 6. SELECTED FINANCIAL DATA\nThe following table summarizes information with respect to the ope(...TRUNCATED)	"ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS\nOPER(...TRUNCATED)	"ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA\nINDEX TO FINANCIAL STATEMENTS:\nThe individual(...TRUNCATED)	"ITEM 9. DISAGREEMENTS ON ACCOUNTING AND FINANCIAL DISCLOSURE\nThere have been no disagreements betw(...TRUNCATED)	"ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF REGISTRANT\nExecutive Officers of the Registrant\nAl(...TRUNCATED)	"ITEM 11. EXECUTIVE COMPENSATION\nThe information contained in the Company's 1994 Proxy Statement un(...TRUNCATED)	"ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT\nThe information contained (...TRUNCATED)	"ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS\nNone reportable in the year ended December(...TRUNCATED)	"ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K\nNo reports on Form 8-K w(...TRUNCATED)
55387_1993.txt	55387	1993	"Item 1. Business\nGeneral\nKentucky Utilities Company (Kentucky Utilities) is a wholly owned subsid(...TRUNCATED)	"Item 2. Properties\nSubstantially all properties are subject to the lien of Kentucky Utilities' Mor(...TRUNCATED)	Item 3. Legal Proceedings None. Item 4.	"Item 4. Submission of Matters to a Vote of Security Holders\nNone.\nExecutive Officers of the Regis(...TRUNCATED)	"Item 5. Market for Registrant's Common Equity and Related Stockholder Matters\nSince December 1, 19(...TRUNCATED)		"Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations\nKent(...TRUNCATED)	"Item 8. Financial Statements and Supplementary Data\nREPORT OF INDEPENDENT PUBLIC ACCOUNTANTS\nTo K(...TRUNCATED)	"Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure\nNone.(...TRUNCATED)	"Item 10. Directors and Executive Officers of the Registrant\nRefer to KU Energy's definitive proxy (...TRUNCATED)	"Item 11. Executive Compensation\nRefer to KU Energy's Proxy Statement under the caption Election of(...TRUNCATED)	"Item 12. Security Ownership of Certain Beneficial Owners and Management\nRefer to KU Energy's Proxy(...TRUNCATED)	Item 13. Certain Relationships and Related Transactions None. PART IV Item 14.	"Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K\n(A) The following (1) fi(...TRUNCATED)
40878_1993.txt	40878	1993	"Item 1. Business\nGTE South Incorporated (the Company), was incorporated in Virginia on July 29, 19(...TRUNCATED)	"Item 2. Properties\nThe Company's property consists of network facilities (79%), company facilities(...TRUNCATED)	"Item 3. Legal Proceedings\nThere are no pending legal proceedings, either for or against the Compan(...TRUNCATED)	Item 4. Submission of Matters to a Vote of Security Holders None. PART II Item 5.	"Item 5. Market for the Registrant's Common Equity and Related Shareholder Matters\nMarket informati(...TRUNCATED)	"Item 6. Selected Financial Data\nReference is made to the Registrant's Annual Report to Shareholder(...TRUNCATED)	"Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations\nRefe(...TRUNCATED)	"Item 8. Financial Statements and Supplementary Data\nReference is made to the Registrant's Annual R(...TRUNCATED)	"Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure\nNone.(...TRUNCATED)	"Item 10. Directors and Executive Officers of the Registrant\nThe names, ages and positions of all t(...TRUNCATED)	"Item 11. Executive Compensation\nExecutive Compensation Tables\nThe following tables provide inform(...TRUNCATED)	"Item 12. Security Ownership of Certain Beneficial Owners and Management\n(a) Security Ownership of (...TRUNCATED)	"Item 13. Certain Relationships and Related Transactions\nThe Company`s executive officers or direct(...TRUNCATED)	"Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K\n(a)(1) Financial Statemen(...TRUNCATED)
53540_1993.txt	53540	1993	"ITEM 1. Business\nRegistrant is not engaged in any business operations and has not been so engaged (...TRUNCATED)	ITEM 2. Properties Registrant does not have an interest in any properties. ITEM 3.	ITEM 3. Legal Proceedings None. PART II. ITEM 5.		"ITEM 5. Market for the Registrant's Common Stock and Related Security Holder Matters\nIncrease and (...TRUNCATED)	"ITEM 6. Selected Financial Data\nFive Year Summary of Operations\nYear ended July 31, -------------(...TRUNCATED)	"ITEM 7. Management's Discussion and Analysis of Financial Condition and Results of Operations\nRefe(...TRUNCATED)	"ITEM 8. Financial Statements and Supplementary Data\nThe financial statements of Registrant are att(...TRUNCATED)		ITEM 10. Directors and Executive Officers of the Registrant ITEM 11.	"ITEM 11. Management Remuneration and Transaction\nNo officer or director of Registrant receives any(...TRUNCATED)	"ITEM 12. Security Ownership of Certain Beneficial Owners and Management\nLeonard M. Ross owns 400,9(...TRUNCATED)		"ITEM 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K\n(a) The Registrant's fina(...TRUNCATED)
800287_1993.txt	800287	1993	"ITEM 1. BUSINESS.\nGENERAL\nChemical Waste Management, Inc. (\"CWM\") and its subsidiaries (hereina(...TRUNCATED)	"ITEM 2. PROPERTIES.\nThe principal fixed assets of the Company consist of its network of transporta(...TRUNCATED)	"ITEM 3. LEGAL PROCEEDINGS.\nThe business in which the Company is engaged is intrinsically connected(...TRUNCATED)	"ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.\nNo matters were submitted to the Comp(...TRUNCATED)	"ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.\nThe Company's c(...TRUNCATED)	"ITEM 6. SELECTED FINANCIAL DATA.\nThe following selected consolidated financial information for eac(...TRUNCATED)	"ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.\nRef(...TRUNCATED)	"ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.\n(a) The Consolidated Balance Sheets as of Dec(...TRUNCATED)	"ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.\nNone(...TRUNCATED)	"ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.\nReference is made to the information (...TRUNCATED)	"ITEM 11. EXECUTIVE COMPENSATION.\nReference is made to the information set forth under the caption (...TRUNCATED)	"ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.\nReference is made to info(...TRUNCATED)	"ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.\nReference is made to the information set (...TRUNCATED)	"ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.\n(a) Financial Statement(...TRUNCATED)

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Dataset Card for [EDGAR-CORPUS]

Dataset Summary

This dataset card is based on the paper EDGAR-CORPUS: Billions of Tokens Make The World Go Round authored by Lefteris Loukas et.al, as published in the ECONLP 2021 workshop.

This dataset contains the annual reports of public companies from 1993-2020 from SEC EDGAR filings.

There is supported functionality to load a specific year.

Care: since this is a corpus dataset, different train/val/test splits do not have any special meaning. It's the default HF card format to have train/val/test splits.

If you wish to load specific year(s) of specific companies, you probably want to use the open-source software which generated this dataset, EDGAR-CRAWLER: https://github.com/nlpaueb/edgar-crawler.

Citation

If this work helps or inspires you in any way, please consider citing the relevant paper published at the 3rd Economics and Natural Language Processing (ECONLP) workshop at EMNLP 2021 (Punta Cana, Dominican Republic):

@inproceedings{loukas-etal-2021-edgar,
    title = "{EDGAR}-{CORPUS}: Billions of Tokens Make The World Go Round",
    author = "Loukas, Lefteris  and
      Fergadiotis, Manos  and
      Androutsopoulos, Ion  and
      Malakasiotis, Prodromos",
    booktitle = "Proceedings of the Third Workshop on Economics and Natural Language Processing",
    month = nov,
    year = "2021",
    address = "Punta Cana, Dominican Republic",
    publisher = "Association for Computational Linguistics",
    url = "https://aclanthology.org/2021.econlp-1.2",
    pages = "13--18",
}

Supported Tasks

This is a raw dataset/corpus for financial NLP. As such, there are no annotations or labels.

Languages

The EDGAR Filings are in English.

Dataset Structure

Data Instances

Refer to the dataset preview.

Data Fields

filename: Name of file on EDGAR from which the report was extracted.
cik: EDGAR identifier for a firm.
year: Year of report.
section_1: Corressponding section of the Annual Report.
section_1A: Corressponding section of the Annual Report.
section_1B: Corressponding section of the Annual Report.
section_2: Corressponding section of the Annual Report.
section_3: Corressponding section of the Annual Report.
section_4: Corressponding section of the Annual Report.
section_5: Corressponding section of the Annual Report.
section_6: Corressponding section of the Annual Report.
section_7: Corressponding section of the Annual Report.
section_7A: Corressponding section of the Annual Report.
section_8: Corressponding section of the Annual Report.
section_9: Corressponding section of the Annual Report.
section_9A: Corressponding section of the Annual Report.
section_9B: Corressponding section of the Annual Report.
section_10: Corressponding section of the Annual Report.
section_11: Corressponding section of the Annual Report.
section_12: Corressponding section of the Annual Report.
section_13: Corressponding section of the Annual Report.
section_14: Corressponding section of the Annual Report.
section_15: Corressponding section of the Annual Report.

import datasets

# Load the entire dataset
raw_dataset = datasets.load_dataset("eloukas/edgar-corpus", "full")

# Load a specific year and split
year_1993_training_dataset = datasets.load_dataset("eloukas/edgar-corpus", "year_1993", split="train")

Data Splits

Config	Training	Validation	Test
full	176,289	22,050	22,036
year_1993	1,060	133	133
year_1994	2,083	261	260
year_1995	4,110	514	514
year_1996	7,589	949	949
year_1997	8,084	1,011	1,011
year_1998	8,040	1,006	1,005
year_1999	7,864	984	983
year_2000	7,589	949	949
year_2001	7,181	898	898
year_2002	6,636	830	829
year_2003	6,672	834	834
year_2004	7,111	889	889
year_2005	7,113	890	889
year_2006	7,064	883	883
year_2007	6,683	836	835
year_2008	7,408	927	926
year_2009	7,336	917	917
year_2010	7,013	877	877
year_2011	6,724	841	840
year_2012	6,479	810	810
year_2013	6,372	797	796
year_2014	6,261	783	783
year_2015	6,028	754	753
year_2016	5,812	727	727
year_2017	5,635	705	704
year_2018	5,508	689	688
year_2019	5,354	670	669
year_2020	5,480	686	685

Dataset Creation

Source Data

Initial Data Collection and Normalization

Initial data was collected and processed by the authors of the research paper EDGAR-CORPUS: Billions of Tokens Make The World Go Round.

Who are the source language producers?

Public firms filing with the SEC.

Annotations

Annotation process

Who are the annotators?

Personal and Sensitive Information

The dataset contains public filings data from SEC.

Considerations for Using the Data

Social Impact of Dataset

Low to none.

Discussion of Biases

The dataset is about financial information of public companies and as such the tone and style of text is in line with financial literature.

Other Known Limitations

The dataset needs further cleaning for improved performance.

Additional Information

Licensing Information

EDGAR data is publicly available.

Shoutout

Huge shoutout to @JanosAudran for the HF Card setup!

References

[Research Paper] Lefteris Loukas, Manos Fergadiotis, Ion Androutsopoulos, and, Prodromos Malakasiotis. EDGAR-CORPUS: Billions of Tokens Make The World Go Round. Third Workshop on Economics and Natural Language Processing (ECONLP). https://arxiv.org/abs/2109.14394 - Punta Cana, Dominican Republic, November 2021.
[Software] Lefteris Loukas, Manos Fergadiotis, Ion Androutsopoulos, and, Prodromos Malakasiotis. EDGAR-CRAWLER. https://github.com/nlpaueb/edgar-crawler (2021)
[EDGAR CORPUS, but in zip files] EDGAR CORPUS: A corpus for financial NLP research, built from SEC's EDGAR. https://zenodo.org/record/5528490 (2021)
[Word Embeddings] EDGAR-W2V: Word2vec Embeddings trained on EDGAR-CORPUS. https://zenodo.org/record/5524358 (2021)
[Applied Research paper where EDGAR-CORPUS is used] Lefteris Loukas, Manos Fergadiotis, Ilias Chalkidis, Eirini Spyropoulou, Prodromos Malakasiotis, Ion Androutsopoulos, and, George Paliouras. FiNER: Financial Numeric Entity Recognition for XBRL Tagging. Proceedings of the 60th Annual Meeting of the Association for Computational Linguistics (Volume 1: Long Papers). https://doi.org/10.18653/v1/2022.acl-long.303 (2022)

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