COMMITMENTS AND CONTINGENCIES (Note)

12 Months Ended

Dec. 26, 2021

Commitments and Contingencies Disclosure [Abstract]

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES

Workers’ compensation commitments

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

(in thousands)	December 26, 2021		December 27, 2020
Cash collateral held by workers’ compensation insurance carriers	$	23,056	$	22,253
Cash and cash equivalents held in Trust	21,590		29,410
Investments held in Trust	135,419		152,247
Letters of credit (1)	6,160		6,095
Surety bonds (2)	21,969		20,616
Total collateral commitments	$	208,194	$	230,621

(1)We have agreements with certain financial institutions to issue letters of credit as collateral.

(2)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, vehicles and equipment. Our leases have remaining terms of up to 15 years. Most leases include one or more options to renew, which can extend the lease term up to 10 years. The exercise of lease renewal options is at our sole discretion. Typically, at the commencement of a lease, we are not reasonably certain we will exercise renewal options, and accordingly they are not considered in determining the initial lease term. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants. We rent or sublease real estate to third parties in limited circumstances.

Operating lease costs were comprised of the following:

(in thousands)	2021		2020
Operating lease costs	$	16,502	$	16,607
Short-term lease costs	8,392		7,781
Other lease costs, net (1)	3,886		3,922
Total lease costs	$	28,780	$	28,310

(1)Other lease costs include variable lease costs, net of sublease income.

Other information related to our operating leases was as follows:

	December 26, 2021	December 27, 2020
Weighted average remaining lease term in years	8.8	9.0
Weighted average discount rate	4.9%	5.0%

Future non-cancelable minimum lease payments under our operating lease commitments as of December 26, 2021, are as follows for each of the next five years and thereafter:

(in thousands)
2022	$	14,898
2023	12,344
2024	9,402
2025	7,565
2026	5,395
Thereafter	33,412
Total undiscounted future non-cancelable minimum lease payments (1)	83,016
Less: Imputed interest (2)	15,992
Present value of lease liabilities	$	67,024

(1)Operating lease payments exclude approximately $1.9 million of legally binding minimum lease payments for leases signed but not yet commenced.

(2)Amount necessary to reduce net minimum lease payments to present value calculated using our incremental borrowing rates, which are consistent with the lease terms at adoption date (for those leases in existence as of the adoption date of the new lease standard) or lease inception (for those leases entered into after the adoption date).

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 cancellable without significant penalty. We had $33.3 million of purchase obligations as of December 26, 2021, of which $20.2 million are expected to be paid in 2022, $11.4 million in 2023, $1.6 million in 2024, and the remaining $0.1 million in 2025.

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 reflect the probable loss that can be reasonably estimated and are immaterial. We also believe that the aggregate range of reasonably possible losses for the Company's exposure in excess of the amount accrued is expected to be immaterial to the Company. It remains possible that despite our current belief, material differences in actual outcomes or changes in management's evaluation or predictions could arise that could have a material effect on the Company's financial condition, results of operations or cash flows.