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Debt | 6 Months Ended
--- | ---
Jul. 01, 2018
Debt |
Debt | 8.Debt Long-term debt, net consists of the following (in thousands):
|  |  |  | July 1, |  |  | December 31,
|  |  |  | 2018 |  |  | 2017
Outstanding debt |  |  | $ | 579,400 |  | $ | 470,000
Unamortized debt issuance costs |  |  |  | (3,013) |  |  | (3,435)
Current portion of long-term debt |  |  |  | (20,000) |  |  | (20,000)
Total long-term debt, less current portion, net |  |  | $ | 556,387 |  | $ | 446,565
Our outstanding debt of $579.4 million at July 1, 2018 represented amounts outstanding under our credit agreement executed in August 2017. Our credit agreement provides for an unsecured revolving credit facility in an aggregate principal amount of $600.0 million (the “Revolving Facility”) and an unsecured term loan facility in an aggregate principal amount of $400.0 million (the “Term Loan Facility” and together with the Revolving Facility, the “Facilities”). Additionally, we have the option to increase the Revolving Facility or the Term Loan Facility in an aggregate amount of up to $300.0 million, subject to certain conditions. Our outstanding debt as of July 1, 2018 under the Facilities of $579.4 million was composed of $385.0 million outstanding under the Term Loan Facility and $194.4 million outstanding under the Revolving Facility. Including outstanding letters of credit, the remaining availability under the Facilities was approximately $371.8 million as of July 1, 2018. In connection with our credit agreement, the Company capitalized $3.2 million of debt issuance costs, which are being amortized into interest expense, over the term of the Facilities. Loans under the Facilities accrue interest at a per annum rate equal to, at the Company’s election, either a LIBOR rate plus a margin ranging from 75 to 200 basis points or a base rate (generally determined by a prime rate, federal funds rate or a LIBOR rate plus 1.00%) plus a margin ranging from 0 to 100 basis points. In each case, the actual margin is determined according to a ratio of the Company’s total indebtedness to earnings before interest, taxes, depreciation and amortization (“EBITDA”) for the then most recently ended four-quarter period (the “Leverage Ratio”). An unused commitment fee at a rate ranging from 15 to 30 basis points per annum, determined according to the Leverage Ratio, applies to the unutilized commitments under the Revolving Facility. Loans outstanding under the credit agreement may be prepaid at any time without premium or penalty, subject to customary breakage costs in the case of borrowings for which a LIBOR rate election is in effect. Up to $35.0 million of the Revolving Facility may be advanced in certain agreed foreign currencies, including Euros, Pounds Sterling, Canadian Dollars, Japanese Yen, and Mexican Pesos. The Facilities mature on August 30, 2022. Quarterly amortization payments are required to be made on the Term Loan Facility in the amount of $5.0 million which began in the fourth quarter of 2017. The obligations under the credit agreement are guaranteed by certain direct and indirect material subsidiaries of the Company. The credit agreement contains customary affirmative and negative covenants, including financial covenants requiring the maintenance of specified fixed charges and leverage ratios. At July 1, 2018, we were in compliance with these financial covenants. We attempt to minimize interest risk exposure by fixing our rate through the utilization of interest rate swaps, which are derivative financial instruments. Our swaps are entered into with financial institutions that participate in our credit agreement. By using a derivative instrument to hedge exposures to changes in interest rates, we expose ourselves to credit risk. Credit risk is due to the possible failure of the counterparty to perform under the terms of the derivative contract. We use interest rate swaps to hedge against the effects of potential interest rate increases on borrowings under our Facilities. As of July 1, 2018, we have the following interest rate swap agreements:
Effective Dates |  | Floating Rate Debt |  | Fixed Rates |
April 30, 2018 through April 30, 2023 |  | $ | 55 | million |  | 2.33 | %
April 30, 2018 through April 30, 2023 |  | $ | 35 | million |  | 2.36 | %
April 30, 2018 through April 30, 2023 |  | $ | 35 | million |  | 2.34 | %
January 30, 2018 through August 30, 2022 |  | $ | 100 | million |  | 1.99 | %
January 30, 2018 through August 30, 2022 |  | $ | 75 | million |  | 1.99 | %
January 30, 2018 through August 30, 2022 |  | $ | 75 | million |  | 2.00 | %
January 30, 2018 through August 30, 2022 |  | $ | 25 | million |  | 1.99 | %
The gain or loss on the swaps is recognized in other comprehensive income/(loss) and reclassified into earnings as adjustments to interest expense in the same period or periods during which the swaps affect earnings. Gains or losses on the swaps representing hedge components excluded from the assessment of effectiveness are recognized in current earnings. The following table provides information on the location and amounts of our swaps in the accompanying condensed consolidated financial statements (in thousands):
|  | Interest Rate Swap Derivatives
|  | Fair Value |  | Fair Value
|  | July 1, |  | December 31,
Balance Sheet Location |  | 2018 |  | 2017
Other current and long-term assets |  | $ | 10,203 |  | $ | 651
There were no derivatives that were not designated as hedging instruments. The effect of derivative instruments on the accompanying condensed consolidated financial statements is as follows (in thousands):
|  |  |  | Location of Gain |  | Amount of Gain |  |
Derivatives - |  | Amount of Gain or |  | or (Loss) |  | or (Loss) |  | Total Interest Expense
Cash Flow |  | (Loss) Recognized |  | Reclassified from |  | Reclassified from |  | on Consolidated
Hedging |  | in AOCI/AOCL |  | AOCI/AOCL into |  | AOCI/AOCL into |  | Statements of
Relationships |  | on Derivative |  | Income |  | Income |  | Income
Interest rate swaps for the three months ended: |  |  |  |  |  |
July 1, 2018 |  | $ | 2,207 |  |  | Interest expense |  | $ | (89) |  | $ | (5,911)
June 25, 2017 |  | $ | (1,170) |  |  | Interest expense |  | $ | (126) |  | $ | (1,894)
Interest rate swaps for the six months ended: |  |  |  |  |  |  |  |  |
July 1, 2018 |  | $ | 7,380 |  |  | Interest expense |  | $ | (197) |  | $ | (11,131)
June 25, 2017 |  | $ | (1,465) |  |  | Interest expense |  | $ | (324) |  | $ | (3,840)
The weighted average interest rates on our debt, including the impact of the interest rate swap agreements, were 3.6% for the three and six months ended July 1, 2018, compared to 2.3% for the corresponding prior year periods. Interest paid, including payments made or received under the swaps, was $5.8 million and $2.1 million for the three months ended July 1, 2018 and June 25, 2017, respectively, and $10.7 million and $3.9 million for the six months ended July 1, 2018 and June 25, 2017, respectively. As of July 1, 2018, the portion of the aggregate $10.2 million interest rate swap asset that would be reclassified into earnings during the next twelve months as interest income approximates $2.4 million.

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- Definition The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -URI http://asc.fasb.org/topic&trid=2208564 + Details
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