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Debt | 12 Months Ended
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Dec. 28, 2013
Debt |
Debt | 11. Debt The Company's debt consisted of the following, excluding capital lease obligations, (in millions):
|  | December 28, 2013 |  | December 29, 2012 |
--- | --- | --- | --- | --- | ---
U.S. revolving line of credit |  | $ | 250.0 |  | $ | 65.0 |
U.S. term loan |  |  | 246.9 |  |  | 0.0 |
Other international |  |  | 3.8 |  |  | 5.6 |
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Total debt |  |  | 500.7 |  |  | 70.6 |
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Less current portion |  |  | 12.6 |  |  | 1.9 |
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Long-term debt |  | $ | 488.1 |  | $ | 68.7 |
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U.S.-Based. On May 17, 2013, the Company and certain of its subsidiaries entered into a five year Credit Agreement (the "Credit Agreement") with (i) the lenders party thereto, (ii) Wells Fargo Bank, National Association ("Wells Fargo"), as administrative agent, swingline lender and issuing lender, (iii) Bank of America, N.A. and JPMorgan Chase Bank, N.A., as syndication agents, (iv) HSBC Bank USA, National Association and Fifth Third Bank, as documentation agents, and (v) Wells Fargo Securities, LLC, Merrill Lynch, Pierce, Fenner & Smith Incorporated and J.P. Morgan Securities LLC, as joint lead arrangers and bookrunners. The Credit Agreement provides for revolving credit loans in the amount of $750 million (the "Revolver"), a swingline subfacility up to $20 million, an up to $10 million subfacility for letters of credit, and a term loan in the amount of $250 million (the "Term Loan"). The Credit Agreement expires and is due and payable on May 17, 2018. The Credit Agreement is guaranteed by all direct and indirect material domestic subsidiaries of the Company and is 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 $4.8 million, which are being amortized over the life of the Credit Agreement. Amounts outstanding under the Revolver and Term Loan 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 2013), (b) the federal funds rate plus 0.25% and (c) the London Interbank Offer Rate ("LIBOR") (0.16% at fiscal year end 2013) for an interest period of one month plus 1.25%) 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 a credit agreement dated as of December 17, 2010, as amended, by and among the Company and certain of its subsidiaries, Wells Fargo Bank, National Association, 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, which was scheduled to mature on December 17, 2014 (the "Prior Credit Agreement"). Under the Prior Credit Agreement, the Company paid approximately $1.2 million and $2.6 million of interest expense during the fiscal year 2013 and 2012, respectively. Additionally, during fiscal 2013, the Company had total borrowings of $346.5 million and repayments of $411.5 million, inclusive of the final payment of $248.0 million. On May 17, 2013, the entire amount outstanding under the Prior Credit Agreement was repaid using funds borrowed under the Credit Agreement. No penalties or other early termination fees were incurred in connection with the termination of the Prior Credit Agreement. During fiscal 2013, the Company had borrowings of $250 million under the Term Loan which was used to pay off amounts outstanding under the Prior Credit Agreement and pay upfront fees related to the Credit Agreement. On September 30, 2013, the Company made a principal payment of $3.1 million on the Term loan. During fiscal 2013, the Company had borrowings of $625.1 million under the Revolver which was used primarily to fund common stock repurchases and normal operating expenses and repayments of $375.1 million. Amounts available under the Revolver are reduced by any amounts outstanding under standby letters of credit. As of December 28, 2013, the Company had available borrowings of approximately $498.9 million under the Revolver. The Company incurred approximately $3.3 million and $1.8 million of interest expense related to the Term Loan and Revolver, respectively, including the interest rate swap impact during fiscal year 2013. 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) a consolidated interest coverage ratio no less than 3.50 to 1.00, and (iii) maximum capital expenditures not in excess of (x) $200.0 million during each of fiscal years 2014 and 2015 and (y) $250.0 million during each fiscal year thereafter, 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 covenants in the Credit Agreement as of December 28, 2013. The Company's debt as of December 28,2013, excluding capital lease obligations, matures as follows (in millions):
Less than 1 Year |  | $ | 12.6 |
Year 2 |  |  | 14.2 |
Year 3 |  |  | 20.4 |
Year 4 |  |  | 25.1 |
Year 5 |  |  | 425.1 |
Thereafter |  |  | 3.3 |
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Total |  | $ | 500.7 |
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Letters of Credit. On May 11, 2012, the Company, Fossil Partners, L.P., FGE and Fossil Asia Pacific Ltd. renewed their Letter of Credit Facility (the "LC Facility") with the Hong Kong and Shanghai Banking Corporation Limited to allow for $80 million of commercial letters of credit. At the end of fiscal years 2013 and 2012, the Company had outstanding letters of credit under the LC Facility of approximately $49.7 million and $39.9 million, respectively. Letters of credit issued under the LC Facility are primarily used for the purchase of inventory. Capital Lease Obligations. At the end of fiscal years 2013 and 2012, the Company had current capital lease obligations of $0.8 million and $0.9 million, respectively, and long-term capital lease obligations of $6.6 million and $6.4 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 505 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21475-112644 Reference 2: 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 3: 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 + Details
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