Debt Obligations

3 Months Ended

Apr. 01, 2018

DEBT OBLIGATIONS

Our indebtedness consisted of the repurchase option related to a sale-leaseback of a portion of our New York headquarters. Our total debt and capital lease obligations consisted of the following:



(In thousands)	April 1, 2018		December 31, 2017
Option to repurchase ownership interest in headquarters building in 2019:
Principal amount	$	250,000	$	250,000
Less unamortized discount based on imputed interest rate of 13.0%	5,719		6,596
Total option to repurchase ownership interest in headquarters building in 2019	244,281		243,404
Capital lease obligations	6,811		6,805
Total long-term debt and capital lease obligations	$	251,092	$	250,209

See Note 9 for more information regarding the fair value of our long-term debt.

“Interest expense and other, net,” as shown in the accompanying Condensed Consolidated Statements of Operations was as follows:



	For the Quarters Ended
(In thousands)	April 1, 2018			March 26, 2017
Interest expense	$	6,958		$	6,864
Amortization of debt costs and discount on debt	876			800
Capitalized interest	(155		)	(220		)
Interest income and other expense, net	(2,802		)	(2,119		)
Total interest expense and other, net	$	4,877		$	5,325

Notice of Intent to Exercise Repurchase Option Under Lease Agreement

On January 30, 2018, the Company provided notice to an affiliate of W.P. Carey & Co. LLC of the Company’s intention to exercise its option under the Lease Agreement, dated March 6, 2009, by and between the parties (the “Lease”) to repurchase a portion of the Company’s leasehold condominium interest in the Company’s headquarters building located at 620 Eighth Avenue, New York, New York (the “Condo Interest”).

The Lease was part of a transaction in 2009 under which the Company sold and simultaneously leased back approximately 750,000 rentable square feet, comprising the Condo Interest. The sale price for the Condo Interest was approximately $225 million. Under the Lease, the Company has an option exercisable in the second half of 2019 to repurchase the Condo Interest for approximately $250 million.

The Company has accounted for the transaction as a financing transaction, and has continued to depreciate the Condo Interest and account for the rental payments as interest expense. The difference between the purchase option price and the net sale proceeds from the transaction is being amortized over the 10-year period of 2009-2019 through interest expense.