Debt Obligations

3 Months Ended

Mar. 31, 2019

DEBT OBLIGATIONS

Our indebtedness consisted of the repurchase option related to the sale-leaseback of a portion of our New York headquarters building located at 620 Eighth Avenue, New York, New York (the “Company Headquarters”). Our total debt and finance lease obligations consisted of the following:



(In thousands)	March 31, 2019		December 30, 2018
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%	2,309		3,202
Net option to repurchase ownership interest in headquarters building in 2019	247,691		246,798
Finance lease obligations (due in August 2019)	6,839		6,832
Total short-term debt and finance lease obligations	254,530		253,630

See Note 9 for more information regarding the fair value of our debt and Note 15 for more information regarding finance lease obligations.

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



	For the Quarters Ended
(In thousands)	March 31, 2019			April 1, 2018
Interest expense	$	7,059		$	6,958
Amortization of debt costs and discount on debt	893			876
Capitalized interest	(44		)	(155		)
Interest income and other expense, net ⁽¹⁾	(6,605		)	(2,802		)
Total interest expense and other, net	$	1,303		$	4,877

⁽¹⁾The quarter ended March 31, 2019, includes fair value adjustments of $1.9 million related to non-marketable equity securities.

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 in the fourth quarter of 2019 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 Headquarters.

The Lease was part of a transaction in 2009 under which the Company sold and simultaneously leased back approximately 750,000 rentable square feet, in the Company Headquarters (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 fourth quarter 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.