We refer to the amount of cash generated from operations in excess of our
capital expenditure needs and net of proceeds from the sale of assets as "free
cash," a measure which management uses to evaluate our ability to fund
acquisitions, repay debt, and otherwise enhance stockholder value through stock
repurchases or dividends.
Beginning in the fourth fiscal quarter of 2010, we have reacted to favorable market conditions to significantly reshape the company's capital structure.
have completed three issuances of low-coupon convertible debentures since the fourth fiscal quarter of 2010, each of which matures thirty years from the date of issuance. We utilized the proceeds of those debenture offerings to repurchase 44.3 million shares of our common stock, representing approximately 24% of our outstanding stock prior to implementing these initiatives. We also entered into a new, larger, revolving credit facility in
December 2010, which has been favorably amended at minimal cost. The total revolving commitment of our credit facility is $528 millionand we have the ability to request up to an additional $22 millionof incremental commitments, subject to the satisfaction of certain conditions. At June 29, 2013and December 31, 2012, $100 millionand $89 million, respectively, was outstanding under the credit facility. The credit facility provides a revolving commitment through December 1, 2015. We continually evaluate market conditions and alternative financing structures. Borrowings under the credit facility bear interest at LIBOR plus an interest margin. The applicable interest margin is based on our leverage ratio. Based on our current leverage ratio, the interest rate on our borrowings will increase from LIBOR plus 1.95% to LIBOR plus 2.25% for the third fiscal quarter of 2013. The interest rate on our borrowings will further increase if our leverage ratio equals or exceeds 2.50 to 1 and will decrease if our leverage ratio decreases below 2.0 to 1. We are also required to pay facility commitment fees of 0.35% per annum on the entire commitment amount. Such facility commitment fees will increase if our leverage ratio equals or exceeds 2.50 to 1. The borrowings under the credit facility are secured by a lien on substantially all assets located in the United States, including accounts receivable, inventory, machinery and equipment, and general intangibles (but excluding real estate, intellectual property registered or licensed for use in, or arising under the laws of, any country other than the United States, and bank and securities accounts) of Vishayand certain significant domestic subsidiaries, and pledges of stock in certain significant domestic and foreign subsidiaries and are guaranteed by certain significant subsidiaries. Certain of our subsidiaries are permitted to borrow under the credit facility, subject to the satisfaction of specified conditions. Any borrowings by these subsidiaries under the credit facility will be guaranteed by Vishay.