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COMMITMENTS AND CONTINGENCIES
 12 Months Ended
Dec. 29, 2013
COMMITMENTS AND CONTINGENCIES  
COMMITMENTS AND CONTINGENCIES

9.    COMMITMENTS AND CONTINGENCIES

We have certain other obligations for various contractual agreements that secure future rights to goods and services to be used in the normal course of operations. These include purchase commitments for printing outsource agreements, planned capital expenditures, lease commitments and self-insurance obligations.

The following table summarizes our minimum annual contractual obligations as of December 29, 2013 and the estimated timing and effect the obligations have on our liquidity and cash flows in future periods:

 
   Payments Due By Period  
(in thousands)
   2014   2015   2016   2017   2018   Thereafter   Total  

Purchase obligations (1)

   $ 23,864   $ 15,500   $ 14,037   $ 14,122   $ 14,121   $ 31,717   $ 113,361  

Operating leases (2)

                                            

Lease obligation

     11,489     9,594     8,960     8,194     7,489     30,742     76,468  

Sublease income

     (2,406 )   (1,862 )   (1,330 )   (777 )   (764 )   (2,204 )   (9,343 )
                               
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Net lease obligation

     9,083     7,732     7,630     7,417     6,725     28,538     67,125  

Workers' compensation obligations (3)

     4,621     3,269     2,443     1,840     1,432     5,178     18,783  
                               
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Total (4)

   $ 37,568   $ 26,501   $ 24,110   $ 23,379   $ 22,278   $ 65,433   $ 199,269  
                               
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
                               
  • (1)
    Represents our purchase obligations primarily related to printing outsource agreements and capital expenditures for property, plant and equipment expiring at various dates through 2028. As of December 29, 2013, we had a fiscal year 2014 purchase commitment of 81,648 metric tons of newsprint from SP Fiber Technologies.

    (2)
    Represents minimum rental commitments under operating leases with non-cancelable terms in excess of one year and sublease income from leased space. We rent certain facilities and equipment under operating leases expiring at various dates through 2028. Total rental expense, included in other operating expenses, from continuing operations amounted to $11.2 million in fiscal year 2013, $12.5 million in fiscal year 2012 and $13.3 million in fiscal year 2011. Most of the leases provide that we pay taxes, maintenance, insurance and certain other operating expenses applicable to the leased premises in addition to the minimum monthly payments. Some of the operating leases have built in escalation clauses. We sublease office space to other companies under noncancellable agreements that expire at various dates through 2023. Sublease income from operating leases totaled $3.9 million, $3.8 million and $4.4 million in fiscal years 2013, 2012 and 2011, respectively.

    (3)
    Represents the expected insurance payments of undiscounted ultimate losses, net of estimated insurance recoveries of approximately $6.2 million, and is based on our historical payment patterns. We retain the risk for workers' compensation resulting from uninsured deductibles per accident or occurrence that are subject to annual aggregate limits. Losses up to the deductible amounts are accrued based upon known claims incurred and an estimate of claims incurred but not reported. For the year ended December 29, 2013, we compiled our historical data pertaining to the self-insurance experiences and actuarially developed the ultimate loss associated with our self-insurance programs for workers' compensation liability. We believe that the actuarial valuation provides the best estimate of the ultimate losses to be expected under these programs. The undiscounted ultimate losses of all our self-insurance reserves related to our workers' compensation liabilities, net of insurance recoveries at December 29, 2013 and December 30, 2012, were $18.7 million and $19.8 million, respectively. We discount the net amount above to present value using an approximate risk-free rate over the average life of our insurance claims. For the years ended December 29, 2013 and December 30, 2012, the discount rate used was 1.9% and 1.1%, respectively. The present value of all self-insurance reserves, net of estimated insurance recoveries, for our workers' compensation liability recorded at December 29, 2013 and December 30, 2012, was $18.7 million and $19.8 million, respectively.

Legal Proceedings and other contingent claims

We are subject to a variety of legal proceedings (including libel, employment, wage and hour, independent contractor and other legal actions) and governmental proceedings (including environmental matters) that arise from time to time in the ordinary course of our business. We are unable to estimate the amount or range of reasonably possible losses. However, we currently believe, after reviewing such actions with counsel, that the expected outcome of pending actions will not have a material effect on our consolidated financial statements. No material amounts for any losses from litigation that may ultimately occur have been recorded in the consolidated financial statements as we believe that any such losses are not probable.

We have certain indemnification obligations related to the sale of assets including but not limited to insurance claims and multi-employer pension plans of disposed newspaper operations. We believe the remaining obligations related to disposed assets will not be material to our financial position, results of operations or cash flows.

As of December 29, 2013, we had $41.1 million of standby letters of credit secured under the Credit Agreement (see Note 5 for further discussion).