Abercrombie & Fitch 2015 Annual Report Download - page 33

Table of Contents
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Amounts borrowed under the ABL Facility bear interest, at the Company’s option, at either an adjusted LIBOR rate plus a margin
of 1.25% to 1.75% per annum, or an alternate base rate plus a margin of 0.25% to 0.75% per annum based on average historical
excess availability during the preceding quarter. The Company is also required to pay a fee of 0.25% per annum on undrawn
commitments under the ABL Facility. Customary agency fees and letter of credit fees are also payable in respect of the ABL
Facility.
As of January 30, 2016, the borrowing base on the ABL Facility was $265.3 million. As of March 24, 2016, the Company had not
drawn on the ABL Facility, but had approximately $1.9 million in outstanding stand-by letters of credit under the ABL Facility.
Term Loan Facility
The Company is also party to a term loan agreement, which provides for a term loan facility of $300 million (the “Term Loan
Facility” and, together with the ABL Facility, the “2014 Credit Facilities”). The Term Loan Facility was issued at a $3 million or
1.0% discount. In addition, the Company recorded deferred financing fees associated with the issuance of the 2014 Credit Facilities
of $5.8 million in aggregate, of which $3.2 million was paid to lenders. The Company is amortizing the debt discount and deferred
financing fees over the respective contractual terms of the 2014 Credit Facilities.
The Company's Term Loan debt is presented in the Consolidated Balance Sheets, net of the unamortized discount and fees paid
to lenders. Net borrowings as of January 30, 2016 were as follows:
(in thousands) January 30, 2016 January 31, 2015
Borrowings, gross at carrying amount $ 293,250 $ 299,250
Unamortized discount (1,929) (2,786)
Unamortized fees paid to lenders (5,086) (3,052)
Borrowings, net 286,235 293,412
Less: short-term portion of borrowings, net of discount and fees — (2,102)
Long-term portion of borrowings, net $ 286,235 $ 291,310
The Term Loan Facility will mature on August 7, 2021 and amortizes at a rate equal to 0.25% of the original principal amount per
quarter, beginning with the fourth quarter of Fiscal 2014. The Company prepaid its' scheduled Fiscal 2016 amortization in January
2016. The Term Loan Facility is subject to (a) beginning in 2016, an annual mandatory prepayment in an amount equal to 0% to
50% of the Company's excess cash flows in the preceding fiscal year, depending on the Company's leverage ratio and (b) certain
other mandatory prepayments upon receipt by the Company of proceeds of certain debt issuances, asset sales and casualty events,
subject to certain exceptions specified therein, including reinvestment rights. The Company was not required to make any
mandatory prepayments under the Term Loan Facility in Fiscal 2016.
At the Company's option, borrowings under the Term Loan Facility will bear interest at either (a) an adjusted LIBOR rate no lower
than 1.00% plus a margin of 3.75% per annum or (b) an alternate base rate plus a margin of 2.75% per annum. Customary agency
fees are also payable in respect of the Term Loan Facility. The interest rate on borrowings under the Term Loan Facility was
4.75% as of January 30, 2016.
The Company's credit facilities are described in Note 11, "BORROWINGS" of the Notes to the Consolidated Financial Statements
included in "ITEM 8. FINANCIAL STATEMENT AND SUPPLEMENTARY DATA," of this Annual Report on Form 10-K.
Operating Activities
Net cash provided by operating activities was $309.9 million for Fiscal 2015 compared to $312.5 million for Fiscal 2014 and
$175.5 million for Fiscal 2013. Significant changes in the underlying drivers of net cash provided by operating activities for Fiscal
2015 as compared to Fiscal 2014 related primarily to changes in accounts payable and accrued expenses and inventories, net. For
Fiscal 2015, the Company had a $51.1 million net cash inflow associated with an increase in accounts payable and accrued expenses
resulting from the Company's extension of vendor payment terms, as compared to a $37.4 million net cash outflow for Fiscal 2014
associated with a decrease in accounts payable and accrued expenses driven by cash payments related to Gilly Hicks restructuring
for Fiscal 2014. The Company also experienced $41.6 million less of a cash inflow from the year-over-year reduction in inventory
balances for Fiscal 2015 as compared to Fiscal 2014. The increase in net cash provided by operating activities in Fiscal 2014
from Fiscal 2013 was primarily driven by changes in inventory and accounts payable and accrued expenses.