XML 26 R15.htm IDEA: XBRL DOCUMENT v3.10.0.1
Debt Obligations
 9 Months Ended
Sep. 30, 2018
Debt Disclosure [Abstract]  
Debt Obligations
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)
 
September 30, 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%
 
4,068

 
6,596

Net option to repurchase ownership interest in headquarters building in 2019
 
245,932

 
243,404

Capital lease obligations
 
6,825

 
6,805

Total debt and capital lease obligations
 
252,757

 
250,209

Less current portion
 
6,825

 
—

Total long term debt and capital lease obligations
 
$
245,932

 
$
250,209


The current portion of capital lease obligations of $6.8 million as of September 30, 2018, is included in “Accrued expenses and other” as shown in the accompanying Condensed Consolidated Balance Sheets. 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
 
For the Nine Months Ended
(In thousands)
 
September 30, 2018

 
September 24, 2017

 
September 30, 2018

 
September 24, 2017

Interest expense
 
$
7,061

 
$
6,956

 
$
21,078

 
$
20,775

Amortization of debt costs and discount on debt
 
839

 
801

 
2,528

 
2,379

Capitalized interest
 
(38
)
 
(345
)
 
(412
)
 
(852
)
Interest income and other, net
 
(3,836
)
 
(2,752
)
 
(9,755
)
 
(7,184
)
Total interest expense and other, net
 
$
4,026

 
$
4,660

 
$
13,439

 
$
15,118


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.