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Debt | 12 Months Ended
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Dec. 31, 2011
Debt [Abstract] |
Debt | 10. Debt Short-Term U.S.-Based: On December 17, 2010, the Company entered into a three year Credit Agreement (the "Credit Agreement") with Wells Fargo Bank, National Association ("Wells Fargo"), as administrative agent, swingline lender and issuing lender, Wells Fargo Securities, LLC, as sole lead arranger and sole book manager and Bank of America, N.A., as lender. The Credit Agreement provides for revolving credit loans in the amount of $300 million (the "Revolver"), a swingline loan of $20 million, and letters of credit. The Credit Agreement expires and is due and payable on December 17, 2013. The Credit Agreement is guaranteed by all direct and indirect material domestic subsidiaries of the Company and secured by 65% of the outstanding voting capital stock and 100% of the non-voting capital stock of the following foreign subsidiaries of the Company: Fossil Europe B.V., Swiss Technology Holding GmbH and Fossil (East) Limited. In connection with entering into the Credit Agreement, the Company paid upfront fees of approximately $1.2 million, which are being amortized over the life of the Credit Agreement. Amounts outstanding under the Revolver bear interest at the Company's option of (i) the base rate (defined as the higher of (a) the prime rate publicly announced by Wells Fargo (3.25% at fiscal year end 2011), (b) the federal funds rate plus 1.50% and (c) the London Interbank Offer Rate ("LIBOR") (0.3% at fiscal year end 2011) plus 1.50%) plus the base rate applicable margin (which varies based upon the Company's consolidated leverage ratio (the "Ratio") from 0.25% if the Ratio is less than 1.00 to 1.00, to 1.00% if the Ratio is greater than or equal to 2.00 to 1.00) or (ii) the LIBOR rate (defined as the quotient obtained by dividing (a) LIBOR by (b) 1.00 minus the Eurodollar reserve percentage) plus the LIBOR rate applicable margin (which varies based upon the Ratio from 1.25% if the Ratio is less than 1.00 to 1.00, to 2.00% if the Ratio is greater than or equal to 2.00 to 1.00). Amounts outstanding under the swingline loan under the Credit Agreement or upon any drawing under a letter of credit bear interest at the base rate plus the base rate applicable margin. Interest based upon the base rate is payable quarterly in arrears. Interest based upon the LIBOR rate is payable either monthly or quarterly in arrears, depending on the interest period selected by the Company. The Revolver also includes a commitment fee ranging from 0.20% to 0.35% for any amounts not drawn under the Revolver. The Credit Agreement replaced that certain Loan Agreement dated as of September 23, 2004, as amended, by and between Fossil Partners, L.P. ("LP"), a subsidiary of the Company, as borrower, the Company, and certain subsidiaries of the Company, as guarantors, and Wells Fargo, which was scheduled to mature on December 31, 2010 (the "Old Agreement"). No amounts were outstanding under the Old Agreement except for three letters of credit in the aggregate amount of $598,000. Upon termination of the Old Agreement, these letters of credit continued to be issued and outstanding under the Credit Agreement. No penalties or other early termination fees were incurred in connection with the termination of the Old Agreement. Loans under the Credit Agreement may be prepaid, in whole or in part, at the option of the Company, in minimum principal amounts of $2.0 million or increments of $1.0 million in excess thereof with respect to a base rate loan, $5.0 million or increments of $1.0 million in excess thereof with respect to a LIBOR rate loan and $100,000 or increments of $100,000 in excess thereof with respect to a swingline loan. Loans under the Credit Agreement must be repaid, or letter of credit obligations cash collateralized with the net proceeds of certain asset sales, insurance and condemnation events. The Company may permanently reduce the revolving credit commitment at any time, in whole or in part, without premium or penalty, in a minimum aggregate principal amount of not less than $3.0 million or increments of $1.0 million in excess thereof. Wells Fargo can accelerate the repayment obligation upon the occurrence of an event of default, including the failure to pay principal or interest, a material inaccuracy of a representation or warranty, violation of covenants, cross-default, change in control, bankruptcy events, failure of a loan document provision, certain ERISA events and material judgments. There were no outstanding borrowings under the Revolver as of December 31, 2011. Amounts available under the Revolver are reduced by any amounts outstanding under stand-by letters of credit. At December 31, 2011, the Company had available borrowings of approximately $299.1 million under the Revolver. As a result of having no outstanding borrowing during fiscal years 2011, 2010 and 2009, the Company incurred no interest expense related to the Revolver or the Old Agreement during fiscal years 2011, 2010 and 2009. Financial covenants in the Credit Agreement require the Company to maintain (i) a consolidated leverage ratio no greater than 2.50 to 1.00, (ii) consolidated tangible net worth of no less than the sum of (a) $600 million plus (b) 25% of positive consolidated net income, (iii) consolidated net income that is not negative for any two consecutive fiscal quarters, and (iv) maximum capital expenditures not in excess of $125 million in any fiscal year, subject to certain adjustments. The Credit Agreement contains representations, warranties, covenants, events of default and indemnities that are customary for agreements of this type. The Company was in compliance with all material covenants in the Credit Agreement as of and during the year ended December 31, 2011. Short-Term Foreign-Based: The Company's Japanese subsidiary, Fossil Japan Inc. ("Fossil Japan"), entered into a 400 million Yen revolving credit facility agreement (the "Facility") on November 25, 2009. The Facility bears interest at the short-term prime rate (1.475% at fiscal year end 2011). Japan-based borrowings, in U.S. dollars, under the Facility were approximately $2.6 million and $4.9 million at fiscal year end 2011 and 2010, respectively. On February 22, 2012, approximately $3.8 million of borrowings under the facility were renewed at the short-term prime rate of 1.475%, with a maturity date of May 22, 2012. The Company incurred approximately $46,000, $61,000, and $61,000 of interest expense related to borrowings under the Facility for fiscal years 2011, 2010 and 2009, respectively. The borrowings entered into by Fossil Japan were primarily used for working capital purposes. On April 6, 2011, the Company's Korean subsidiary, Fossil (Korea) Limited ("Fossil Korea"), entered into a new $20 million credit facility agreement (the "Agreement") with Bank of America, N.A. Seoul Branch. Borrowings under the Agreement are renewed on a monthly basis. The Agreement bears interest based on a three month CD rate which is published by the Korea Securities Dealers Association (3.55% at fiscal year end 2011), plus 120 basis points for a one month period or plus 130 basis points for a three month period. Korea-based borrowings, in U.S. dollars, under the Agreement were approximately $6.0 million at fiscal year end 2011, at an interest rate of 4.75%. Approximately $6.2 million of borrowings under the Agreement were renewed at an interest rate of approximately 4.75% in each of January 2012 and February 2012. The February borrowings have a maturity date of March 21, 2012. The Company incurred approximately $265,000 of interest expense related to borrowings under the Agreement for fiscal year 2011. The borrowings entered into by Fossil Korea were primarily used for working capital purposes. On September 21, 2007, Fossil Group Europe, Gmbh ("FGE"), a wholly owned subsidiary of the Company, entered into a long-term note payable with its primary bank (the "FGE Note") related to the purchase of a building in Basel, Switzerland. The FGE Note requires FGE to submit an annual balance sheet and income statement and is secured by the Company's building in Basel, Switzerland. The FGE Note has a variable interest rate (2% at fiscal year end 2011) with interest payments due quarterly. This note requires minimum principal payments of 100,000 Swiss Francs (approximately $107,000 U.S. dollars at fiscal year end 2011) per year with no stated maturity and no penalties for early payment. The principal payment for the subsequent fiscal year is included in short-term borrowings. Long-Term Foreign-Based: In addition to the annual principal payment of 100,000 Swiss Francs, which is classified as a short-term borrowing, a portion of the FGE Note was classified as a long-term borrowing at the end of fiscal year 2011. The Company incurred approximately $82,000, $76,000, and $76,000 of interest expense related to the FGE Note for fiscal years 2011, 2010, and 2009, respectively. At the end of fiscal years 2011 and 2010, total current and long-term amounts outstanding under the FGE Note were $3.8 million and $3.9 million, respectively. Letters of Credit: On February 7, 2011, the Company, LP, FGE and Fossil Asia Pacific Ltd. renewed its Letter of Credit Facility (the "LC Facility") with the Hongkong and Shanghai Banking Corporation Limited to allow for $60 million of commercial letters of credit. Prior to this renewal, the LC Facility allowed for $40 million of commercial letters of credit. At the end of fiscal years 2011 and 2010, the Company had outstanding letters of credit under the LC Facility of approximately $36.9 million and $37.2 million, respectively. Letters of credit issued under the LC Facility are primarily for the purchase of inventory. Capital Lease Obligations: At the end of fiscal years 2011 and 2010, the Company had current capital lease obligations of $0.3 million each year and long-term capital lease obligations of $2.5 million and $0.7 million, respectively.

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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 210 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.5-02.19,20,22) -URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 129 -Paragraph 2, 4 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 02 -Paragraph 19, 20, 22 -Article 5 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21475-112644 + Details
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