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Debt | 12 Months Ended
--- | ---
Dec. 30, 2017
Debt Disclosure [Abstract] |
Debt | Debt The Company's debt consisted of the following, excluding capital lease obligations, (in millions):
| December 30, 2017 |  | December 31, 2016
U.S. revolving line of credit (1) | $ | 440.3 |  |  | $ | 441.0 |
U.S. term loan | — |  |  | 189.9 |
Other international | 0.9 |  |  | — |
Total debt | $ | 441.2 |  |  | $ | 630.9 |
Less current portion | 0.9 |  |  | 25.0 |
Long-term debt | $ | 440.3 |  |  | $ | 605.9 |
___________________________________________
(1) | Net of debt issuance costs of $4.7 million and $3.8 million at December 30, 2017 and December 31, 2016, respectively.
U.S.-Based. On March 9, 2015, the Company entered into an Amended and Restated Credit Agreement (the “Credit Agreement”). On March 10, 2017, the Company entered into the Second Amendment to the Credit Agreement (the “Second Amendment”). The Second Amendment reduced the Company's revolving credit facility (the "Revolving Credit Facility") and (i) provided for revolving credit loans in the amount of $850.00 million, with an up to $20.0 million subfacility for swingline loans (the “Swingline Loan”), and an up to $10.0 million subfacility for letters of credit, and (ii) continued the Company's Term Loan in the amount of $231.3 million. The Second Amendment extended the maturity date of the Credit Agreement to May 17, 2019 and removed the Company’s ability to make offers to the lenders to extend the maturity date of the Term Loan or the Revolving Credit Facility. The Second Amendment also amended the mandatory prepayment provisions under the credit agreement and provided that to the extent there were excess proceeds remaining from the issuance of debt by the Company following the repayment in full of the Term Loan, the Company would be required to repay the Revolving Credit Facility in the amount of such excess proceeds, with a corresponding permanent reduction in the Revolving Credit Facility in the amount of up to $50.0 million. In accordance with the Second Amendment, dividends paid from foreign subsidiaries to U.S. subsidiaries or Fossil Group, Inc., were required to be used to repay the Term Loan and then up to $50.0 million of the Revolving Credit Facility. The Second Amendment amended the applicable margin used to calculate the interest rate that was applicable to base rate loans and LIBOR rate loans under the Credit Agreement. As of December 30, 2017, the interest rate margin for base rate loans was 2.75% per annum and the interest rate margin for LIBOR rate loans was 3.75% per annum. As of December 30, 2017, amounts outstanding under the Revolving Credit Facility and the Term Loan under the Credit Agreement bore interest, at the Company's option, at (i) the base rate (defined as the highest of (a) the prime rate publicly announced by Wells Fargo (4.5% at fiscal year end 2017), (b) the federal funds rate plus 0.5% and (c) the London Interbank Offer Rate ("LIBOR") (1.49% at fiscal year end 2017) for an interest period of one month plus 1.0%) plus the base rate applicable margin (2.75% at fiscal year end 2017) 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 (3.75% at fiscal year end 2017). Amounts outstanding under the Swingline Loan under the Credit Agreement or upon any drawing under a letter of credit bore interest at the base rate plus the applicable margin. Interest based upon the base rate is payable quarterly in arrears. Interest based upon the LIBOR rate is payable on the last day of the applicable interest period. The Second Amendment changed the consolidated total leverage ratio that the Company was required to comply with from 3.25 to 1.00 to the ratios as set forth below:
Period | Maximum Ratio
October 1, 2017 through and including March 31, 2018 | 3.25 to 1.00
April 1, 2018 through and including September 29, 2018 | 3.50 to 1.00
September 30, 2018 and thereafter | 3.25 to 1.00
The Second Amendment also changed the commitment fee payable by the Company for unused amounts of the commitments under the Revolving Credit Facility to 0.50% per annum, payable quarterly in arrears. In connection with any letter of credit, the Company was required to pay (i) a letter of credit commission, payable quarterly in arrears, in an amount equal to the daily amount available to be drawn under such letter of credit multiplied by the applicable margin with respect to revolving credit loans that were LIBOR rate loans, (ii) a fronting fee, payable quarterly in arrears, as set forth in the applicable letter of credit application or as otherwise separately agreed by the Company and the issuing lender and (iii) normal and customary costs and expenses incurred or charged by the issuing lender in issuing, effecting payment under, amending or otherwise administering the letter of credit. Loans under the Credit Agreement could be prepaid, in whole or in part, at the option of the Company, in minimum principal amounts of (i) $2.0 million or increments of $1.0 million in excess thereof, with respect to a base rate loan under the Revolving Credit Facility, (ii) $5.0 million or increments of $1.0 million in excess thereof, with respect to a LIBOR rate loan under the Revolving Credit Facility, (iii) $5.0 million or increments of $1.0 million in excess thereof, with respect to the Term Loan and (iv) $0.1 million or increments of $0.1 million in excess thereof, with respect to a Swingline Loan. Loans under the Credit Agreement were required to be repaid with the net cash proceeds of certain asset sales or insurance and condemnation events. The Company could 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. The repayment obligation under the Credit Agreement could be accelerated 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. During fiscal year 2017, the Company made principal payments of $193.8 million under the Term Loan, which repaid the outstanding balance. The Company had net borrowings of $4.0 million under the Revolving Credit Facility during fiscal year 2017. Amounts available under the Revolving Credit Facility were reduced by any amounts outstanding under standby letters of credit. As of December 30, 2017, the Company had available borrowing capacity of approximately $199.8 million under the Revolving Credit Facility, which was favorably impacted by a $149.6 million international cash balance. The Company incurred approximately $8.5 million of interest expense under the Term Loan during fiscal year 2017, including the impact of the related interest rate swap. The Company incurred approximately $27.4 million of interest expense under the Revolving Credit Facility during fiscal year 2017. The Company incurred approximately $3.7 million of interest expense related to the amortization of debt issuance costs during fiscal year 2017. Additionally, the Company recorded a loss of $1.0 million in other income (expense) - net for debt issuance costs associated with the Term Loan that was paid off during fiscal year 2017. See Note 20—Subsequent Event for more information about the Company's amended credit facilities. Foreign-Based. On June 23, 2016, Fossil Accessories South Africa Pty Ltd, entered into a 20 million South African rand short-term note with First National Bank (the "Fossil South Africa Note") that is used for working capital purposes. The Fossil South Africa Note bears interest at the bank's prime rate, 10.25% as of year end 2017. The Fossil South Africa note is reviewed annually for renewal. South African rand-based borrowings, in U.S. dollars, under the Fossil South Africa Note were approximately $0.9 million as of December 30, 2017. The Company's debt as of December 30, 2017, excluding capital lease obligations, matures as follows (in millions):
Less than 1 Year | $ | 0.9 |
Year 2 | 445.0 |
Principal amounts repayable | 445.9 |
Debt issuance costs | (4.7 | )
Total debt outstanding | $ | 441.2 |
Letters of Credit. At the end of fiscal year 2016, the Company had $54.3 million of outstanding commercial letters of credit under the Company's Letter of Credit Facility (the "LC Facility"). During fiscal year 2017, the LC facility was canceled and all outstanding letters of credit were paid. Capital Lease Obligations. At the end of fiscal years 2017 and 2016, the Company had current capital lease obligations of $1.2 million and $1.4 million, respectively, and long-term capital lease obligations of $3.6 million and $4.0 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 470 -URI http://asc.fasb.org/topic&trid=2208564 + Details
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