COMMITMENTS AND CONTINGENCIES

Workers’ compensation commitments

Our insurance carriers and certain state workers’ compensation programs require us to collateralize a portion of our workers’ compensation obligation, for which they become responsible should we become insolvent. The collateral typically takes the form of cash and cash equivalents, highly rated investment grade debt securities, letters of credit and/or surety bonds. On a regular basis these entities assess the amount of collateral they will require from us relative to our workers' compensation obligation. The majority of our collateral obligations are held in the Trust.

We have provided our insurance carriers and certain states with commitments in the form and amounts listed below (in thousands):



	December 26, 2014		December 27, 2013
Cash collateral held by insurance carriers	$	22,639	$	23,747
Cash and cash equivalents held in Trust (1)	43,856		31,474
Investments held in Trust	90,095		86,678
Letters of credit (2)	6,513		7,867
Surety bonds (3)	16,861		16,099
Total collateral commitments	$	179,964	$	165,865


(1)	Included in this amount is $0.7 million and $0.8 million of accrued interest at December 26, 2014 and December 27, 2013, respectively.


(2)	We have agreements with certain financial institutions to issue letters of credit as collateral. We had $1.9 million of restricted cash collateralizing our letters of credit at December 26, 2014 and December 27, 2013.

(3)

Our surety bonds are issued by independent insurance companies on our behalf and bear annual fees based on a percentage of the bond, which are determined by each independent surety carrier. These fees do not exceed 2.0% of the bond amount, subject to a minimum charge. The terms of these bonds are subject to review and renewal every one to four years and most bonds can be canceled by the sureties with as little as 60 days notice.

Operating leases

We have contractual commitments in the form of operating leases related to office space and equipment. Future non-cancelable minimum lease payments under our operating lease commitments as of December 26, 2014 are as follows for each of the next five years and thereafter (in thousands):



2015	$	4,417
2016	3,403
2017	2,940
2018	2,655
2019	2,459
Thereafter	3,573
Total future non-cancelable minimum lease payments	$	19,447

The majority of operating leases pertaining to our office space provide for renewal options ranging from three to five years. Operating leases are generally renewed in the normal course of business, and most of the options are negotiated at the time of renewal. However, for the majority of our leases, we have the right to cancel the lease within 90 days of notification. Accordingly, we have not included the leases with 90 day cancellation provisions in our disclosure of future minimum lease payments. Total rent expense for 2014, 2013, and 2012 was $23.0 million, $22.5 million, and $22.0 million, respectively.

Purchase Obligations

Purchase obligations include agreements to purchase goods and services in the ordinary course of business that are enforceable, legally binding and specify all significant terms. Purchase obligations do not include agreements that are cancelable without significant penalty. We had $15.6 million of purchase obligations as of December 26, 2014, of which $10.2 million are expected to be paid in 2015.

Legal contingencies and developments

We are involved in various proceedings arising in the normal course of conducting business. We believe the liabilities included in our financial statements reflects the probable loss that can be reasonably estimated. The resolution of those proceedings is not expected to have a material effect on our results of operations or financial condition.