XML 26 R15.htm IDEA: XBRL DOCUMENT v3.19.2
Debt Obligations
 6 Months Ended
Jun. 30, 2019
Debt Disclosure [Abstract]  
Debt Obligations 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)
 
June 30, 2019

 
December 30, 2018

Option to repurchase ownership interest in headquarters building in 2019:
 
 
 
 
Principal amount (1)
 
$
245,339

 
$
250,000

Less unamortized (premium)/discount based on imputed interest rate of 12.0% in 2019 and 13.0% in 2018
 
(2,146
)
 
3,202

Net option to repurchase ownership interest in headquarters building in 2019
 
247,485

 
246,798

Finance lease obligation (due in August 2019)
 
6,893

 
6,832

Total short-term debt and finance lease obligations
 
$
254,378

 
$
253,630


(1) The reduction in principal amount reflects a $4.7 million credit to the repurchase price as the result of a change in the closing date to December 2019. This credit will be accounted for as a reduction in interest expense.
See Note 9 for more information regarding the fair value of our debt and Note 15 for more information regarding finance lease obligation.

Interest expense and other, net, as shown in the accompanying Condensed Consolidated Statements of Operations was as follows:
 
 
For the Quarters Ended
 
For the Six Months Ended
(In thousands)
 
June 30, 2019

 
July 1, 2018

 
June 30, 2019

 
July 1, 2018

Interest expense
 
$
7,137

 
$
7,059

 
$
14,196

 
$
14,017

Amortization of debt costs and (premium)/discount on debt
 
(205
)
 
813

 
688

 
1,689

Capitalized interest
 
(8
)
 
(219
)
 
(52
)
 
(374
)
Interest income and other expense, net (1)
 
(5,410
)
 
(3,117
)
 
(12,015
)
 
(5,919
)
Total interest expense and other, net
 
$
1,514

 
$
4,536

 
$
2,817

 
$
9,413


(1) The six months ended June 30, 2019, include a fair value adjustment of $1.9 million related to the sale of a non-marketable equity security.
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 Company has accounted for the transaction as a financing transaction and accounted 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.
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 December 2019 to repurchase the Condo Interest for $245.3 million.