Debt Obligations

Our total debt and capital lease obligations consisted of the following:



(In thousands, except percentages)	Coupon Rate		December 25, 2011		December 26, 2010
Senior notes due in 2012, net of unamortized debt costs of $100 in 2011 and $229 in 2010	4.610	%	$	74,900	$	74,771
Senior notes due in 2015, net of unamortized debt costs of $109 in 2011 and $140 in 2010	5.0	%	249,891		249,860
Senior notes due in 2015, called in 2011, net of unamortized debt costs of $22,320 in 2010	14.053	%	—		227,680
Senior notes due in 2016, net of unamortized debt costs of $4,213 in 2011 and $4,898 in 2010	6.625	%	220,787		220,102
Option to repurchase ownership interest in headquarters building in 2019, net of unamortized debt costs of $29,139 in 2011 and $32,694 in 2010			220,861		217,306
Total debt			766,439		989,719
Capital lease obligations			6,701		6,724
Total debt and capital lease obligations			$	773,140	$	996,443

Based on borrowing rates currently available for debt with similar terms and average maturities, the fair value of our long-term debt was approximately $800 million as of December 25, 2011 and approximately $1.1 billion as of December 26, 2010.

The aggregate face amount of maturities of debt over the next five years and thereafter is as follows:



(In thousands)	Amount
2012	$	75,000
2013	—
2014	—
2015	250,000
2016	225,000
Thereafter	250,000
Total face amount of maturities	800,000
Less: Unamortized debt costs	(33,561		)
Carrying value of debt	$	766,439

Interest expense, net, as shown in the accompanying Consolidated Statements of Operations was as follows:



(In thousands)	December 25, 2011			December 26, 2010			December 27, 2009
Cash interest expense	$	79,187		$	79,349		$	78,606
Non-cash amortization of discount on debt	6,933			7,251			6,084
Capitalized interest	(427		)	(299		)	(1,566		)
Interest income	(450		)	(1,239		)	(1,423		)
Total interest expense, net	$	85,243		$	85,062		$	81,701

4.610% Notes

We have $75.0 million aggregate principal amount of 4.610% senior notes due September 26, 2012, outstanding (the “4.610% Notes”). The 4.610% Notes were reclassified to “Current portion of long-term debt and capital lease obligations” in our Consolidated Balance Sheet in the fourth quarter of 2011.

The 4.610% Notes may be redeemed, in whole or in part, at any time, at a price equal to 100% of the principal amount of the notes redeemed, plus accrued and unpaid interest to the redemption date plus a “make-whole” premium. The 4.610% Notes are not otherwise callable.

The 4.610% Notes are subject to certain covenants that, among other things, limit (subject to customary exceptions) our ability and the ability of certain material subsidiaries to:


•	create liens on certain assets to secure debt; and


•	enter into certain sale-leaseback transactions.

5.0% Notes

We have $250.0 million aggregate principal amount of 5.0% senior unsecured notes due March 15, 2015, outstanding (the “5.0% Notes”).

The 5.0% Notes may be redeemed, in whole or in part, at any time, at a price equal to 100% of the principal amount of the notes redeemed, plus accrued and unpaid interest to the redemption date plus a “make-whole” premium. The 5.0% Notes are not otherwise callable.

The 5.0% Notes are subject to certain covenants that, among other things, limit (subject to customary exceptions) our ability and the ability of certain material subsidiaries to:


•	create liens on certain assets to secure debt; and


•	enter into certain sale-leaseback transactions.

14.053% Notes

In January 2009, pursuant to a securities purchase agreement with Inmobiliaria Carso, S.A. de C.V. and Banco Inbursa S.A., Institución de Banca Múltiple, Grupo Financiero Inbursa (each an “Investor” and collectively the “Investors”), we issued, for an aggregate purchase price of $250.0 million, (1) $250.0 million aggregate principal amount of 14.053% senior unsecured notes due January 15, 2015 (the “14.053% Notes”), and (2) detachable warrants to purchase 15.9 million shares of our Class A Common Stock at a price of $6.3572 per share. The warrants are exercisable at the holder’s option at any time and from time to time, in whole or in part, until January 15, 2015. Each Investor is an affiliate of Carlos Slim Helú, the beneficial owner of approximately 8% of our Class A Common Stock (excluding the warrants). Each Investor purchased an equal number of 14.053% Notes and warrants.

On August 15, 2011, we prepaid in full all $250.0 million outstanding aggregate principal amount of the 14.053% Notes. The prepayment totaled approximately $280 million, comprising (1) the $250.0 million aggregate principal amount of the 14.053% Notes; (2) approximately $3 million representing all interest that was accrued and unpaid on the 14.053% Notes to August 15, 2011; and (3) a make-whole premium amount of approximately $27 million due in connection with the prepayment. We funded the prepayment from available cash. As a result of this prepayment, we recorded a $46.4 million pre-tax charge in the third quarter of 2011. This charge is included in “Premium on debt redemptions” in our Consolidated Statements of Operations.

6.625% Notes

In November 2010, we completed an offering of $225.0 million aggregate principal amount of 6.625% senior unsecured notes due December 15, 2016 (“6.625% Notes”).

We received proceeds of approximately $220 million (purchase price of $225.0 million, net of approximately $5 million in transaction costs). The effective interest rate on this transaction was approximately 7%.

We have the option to redeem all or a portion of the 6.625% Notes, at any time, at a price equal to 100% of the principal amount of the notes redeemed plus accrued and unpaid interest to the redemption date plus a “make-whole” premium. The 6.625% Notes are not otherwise callable.

The 6.625% Notes are subject to certain covenants that, among other things, limit (subject to customary exceptions) our ability and the ability of our subsidiaries to:


•	incur additional indebtedness and issue preferred stock;


•	pay dividends or make other equity distributions;


•	agree to any restrictions on the ability of our restricted subsidiaries to make payments to us;


•	create liens on certain assets to secure debt;


•	make certain investments;


•	merge or consolidate with other companies or transfer all or substantially all of our assets; and


•	engage in sale and leaseback transactions.

Sale-Leaseback Financing

In March 2009, an affiliate of our Company entered into an agreement to sell and simultaneously lease back a portion of our leasehold condominium interest in our Company’s headquarters building located at 620 Eighth Avenue in New York City (the “Condo Interest”). The sale price for the Condo Interest was $225.0 million. We have an option, exercisable in 2019, to repurchase the Condo Interest for $250.0 million. The lease term is 15 years, and we have three renewal options that could extend the term for an additional 20 years.

The transaction is accounted for as a financing transaction. As such, we have continued to depreciate the Condo Interest and account for the rental payments as interest expense. The difference between the purchase option price of $250.0 million and the net sale proceeds of approximately $211 million, or approximately $39 million, is being amortized over a 10-year period through interest expense. The effective interest rate on this transaction was approximately 13%.

Revolving Credit Facility

In June 2011, we entered into a new $125.0 million asset-backed 5-year revolving credit facility. This new credit facility replaced our $400.0 million revolving credit facility, which was to expire on June 21, 2011. As of December 25, 2011, there were $0 outstanding borrowings under the new credit facility.

Borrowings under the new credit facility will be secured by a lien on certain advertising receivables. In addition, borrowings bear interest at specified margins based on our utilization and at rates that vary between the LIBOR and prime rates (as defined by the credit agreement) depending on the term to maturities we specify. The new credit facility contains various customary affirmative and negative covenants.

Premium on Debt Redemptions

In August 2011, we recorded a $46.4 million pre-tax charge in connection with the prepayment of our 14.053% Notes.

In April 2009, we settled the redemption of all $250.0 million outstanding aggregate principal amount of our 4.5% notes due March 15, 2010, that had been called for redemption in March 2009. The redemption price of approximately $260 million included a $9.3 million premium and was computed under the terms of the notes as the present value of the scheduled payments of principal and unpaid interest, plus accrued interest to the redemption settlement date.