Commitments and Contingent Liabilities

Operating Leases

Operating lease commitments are primarily for office space and equipment. Certain office space leases provide for rent adjustments relating to changes in real estate taxes and other operating costs.

Rental expense amounted to approximately $16 million in 2016, 2015 and 2014. The approximate minimum rental commitments under noncancelable leases, net of subleases, as of December 25, 2016 were as follows:



(In thousands)	Amount
2017	$	11,362
2018	5,969
2019	3,487
2020	3,091
2021	2,903
Later years	4,113
Total minimum lease payments	30,925
Less: noncancelable subleases	(683		)
Total minimum lease payments, net of noncancelable subleases	$	30,242

Capital Leases

Future minimum lease payments for all capital leases, and the present value of the minimum lease payments as of December 25, 2016, were as follows:



(In thousands)	Amount
2017	$	552
2018	552
2019	7,245
2020	—
2021	—
Later years	—
Total minimum lease payments	8,349
Less: imputed interest	(1,570		)
Present value of net minimum lease payments including current maturities	$	6,779

Restricted Cash

We were required to maintain $24.9 million of restricted cash as of December 25, 2016 and $28.7 million as of December 27, 2015, the majority of which is set aside to collateralize workers’ compensation obligations.

Newspaper and Mail Deliverers – Publishers’ Pension Fund

In September 2013, the Newspaper and Mail Deliverers-Publishers’ Pension Fund (the “NMDU Fund”) assessed a partial withdrawal liability against the Company in the gross amount of approximately $26 million for the plan years ending May 31, 2012 and 2013 (the “Initial Assessment”), an amount that was increased to a gross amount of approximately $34 million in December 2014, when the NMDU Fund issued a revised partial withdrawal liability assessment for the plan year ending May 31, 2013 (the “Revised Assessment”). The NMDU Fund claimed that when City & Suburban Delivery Systems, Inc., a retail and newsstand distribution subsidiary of the Company and the largest contributor to the NMDU Fund, ceased operations in 2009, it triggered a decline of more than 70% in contribution base units in each of these two plan years.

The Company disagreed with both the NMDU Fund’s determination that a partial withdrawal occurred and the methodology by which it calculated the withdrawal liability, and the parties engaged in arbitration proceedings to resolve the matter. On June 14, 2016, the arbitrator issued an interim opinion and award that supported the NMDU Fund’s determination that a partial withdrawal had occurred, including concluding that the methodology used to calculate the Initial Assessment was correct. However, the arbitrator also concluded that the NMDU Fund’s calculation of the Revised Assessment was incorrect. The Company expects to appeal the arbitrator’s decision following the issuance of the final opinion and award.

Due to requirements of the Employee Retirement Income Security Act of 1974 that sponsors make payments demanded by plans during arbitration and any resultant appeals, the Company had been making payments to the NMDU Fund since September 2013 relating to the Initial Assessment and February 2015 relating to the Revised Assessment based on the NMDU Fund’s demand. As a result, as of December 25, 2016, we have paid $11.7 million relating to the Initial Assessment since the receipt of the initial demand letter. We also paid $5.0 million relating to the Revised Assessment, which was refunded in July 2016 based on the arbitrator’s ruling. Amounts recognized as expense were $10.7 million (including $6.7 million resulting from the interim decision (see Note 9 for more information)), $6.8 million and $3.6 million for the fiscal years ended December 25, 2016, December 27, 2015 and December 28, 2014, respectively.

As a result of the interim opinion and award relating to the Initial Assessment, the Company had a liability of $9.7 million as of December 25, 2016. Management believes it is reasonably possible that the total loss in this matter could exceed the liability established by a range of zero to approximately $10.0 million.

NEMG T&G, Inc.

The Company has been involved in class action litigation brought on behalf of individuals who, from 2006 to 2011, delivered newspapers at NEMG T&G, Inc., a subsidiary of the Company (“T&G”). T&G was a part of the New England Media Group, which the Company sold in 2013. The plaintiffs asserted several claims against T&G, including a challenge to their classification as independent contractors, and sought unspecified damages. In December 2016, the Company reached a settlement with respect to the claims. This settlement remains subject to court approval, and a final hearing is scheduled to take place in April 2017. As a result of the settlement, the Company recorded a charge of $3.7 million in the fourth quarter within discontinued operations.

Other

We are involved in various legal actions incidental to our business that are now pending against us. These actions are generally for amounts greatly in excess of the payments, if any, that may be required to be made. Although the Company cannot predict the outcome of these matters, it is possible that an unfavorable outcome in one or more matters could be material to the Company’s consolidated results of operations or cash flows for an individual reporting period. However, based on currently available information, management does not believe that the ultimate resolution of these matters, individually or in the aggregate, is likely to have a material effect on the Company’s financial position.