Commitments and Contingencies

Operating Leases - The Company leases restaurant and office facilities and certain equipment under operating leases mainly having initial terms expiring between 2016 and 2032. The restaurant facility leases have renewal clauses primarily from five to 30 years, exercisable at the option of the Company. Certain of these leases require the payment of contingent rentals leased on a percentage of gross revenues, as defined by the terms of the applicable lease agreement.

Total rent expense is as follows for the periods indicated:



	FISCAL YEAR
(dollars in thousands)	2015		2014		2013
Rent expense (1)	$	164,754	$	169,701	$	156,720

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(1)	Includes contingent rent expense of $7.4 million, $8.0 million and $6.5 million for fiscal years 2015, 2014 and 2013, respectively.

As of December 27, 2015, future minimum rental payments under non-cancelable operating leases are as follows:



(dollars in thousands)
2016	$	143,866
2017	129,584
2018	114,010
2019	96,872
2020	81,966
Thereafter	393,864
Total minimum lease payments (1)	$	960,162

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(1)	Total minimum lease payments have not been reduced by minimum sublease rentals of $1.8 million due in future periods under non-cancelable subleases.

Purchase Obligations - Purchase obligations were $509.7 million and $563.2 million at December 27, 2015 and December 28, 2014, respectively. These purchase obligations are primarily due within five years, however, commitments with various vendors extend through April 2022. Outstanding commitments consist primarily of beverage products, pork, seafood, beef and other food products related to normal business operations and contracts for restaurant level service contracts, advertising, insurance and technology. In 2015, the Company purchased more than 90% of its beef raw materials from four beef suppliers that represent approximately 85% of the total beef marketplace in the U.S.

Litigation and Other Matters - In relation to the various legal matters discussed below, the Company had $4.5 million and $1.0 million of liability recorded as of December 27, 2015 and December 28, 2014, respectively. During fiscal years 2015, 2014 and 2013, the Company recognized $4.6 million, $1.2 million and $0.4 million, respectively, in Other restaurant operating in its Consolidated Statements of Operations and Comprehensive Income for legal settlements.

On October 4, 2013, two then-current employees (the “Nevada Plaintiffs”) filed a purported collective action lawsuit against the Company, OSI Restaurant Partners, LLC, and two of its subsidiaries in the U.S. District Court for the District of Nevada (Cardoza, et al. v. Bloomin’ Brands, Inc., et al., Case No.: 2:13-cv-01820-JAD-NJK). The complaint alleges violations of the Fair Labor Standards Act by requiring employees to work off the clock, complete on-line training without pay, and attend meetings in the restaurant without pay. The nationwide collective action permitted all hourly employees in all Outback Steakhouse restaurants to join. The suit seeks an unspecified amount in back pay for the employees that joined the lawsuit, an equal amount in liquidated damages, costs, expenses, and attorney’s fees. The Nevada Plaintiffs also filed a companion lawsuit in Nevada state court alleging that the Company violated the state break time rules. In November 2015, the Company reached a tentative settlement agreement resolving all claims and the cost of class administration for $3.2 million. The Company is in process of finalizing the settlement agreement, which will then be submitted to the court for approval. Court approval is required before any settlement agreement between the parties becomes final.

In addition, the Company is subject to legal proceedings, claims and liabilities, such as liquor liability, sexual harassment and slip and fall cases, which arise in the ordinary course of business and are generally covered by insurance if they exceed specified retention or deductible amounts. In the opinion of management, the amount of ultimate liability with respect to those actions will not have a material adverse impact on the Company’s financial position or results of operations and cash flows.

Insurance - As of December 27, 2015, the future payments the Company expects for workers’ compensation, general liability and health insurance claims are:



(dollars in thousands)
2016	$	20,909
2017	12,182
2018	8,481
2019	5,196
2020	2,861
Thereafter	14,162
	$	63,791

Discount rates of 1.08% and 0.83% were used for December 27, 2015 and December 28, 2014, respectively. A reconciliation of the expected aggregate undiscounted reserves to the discounted reserves for workers’ compensation, general liability and health insurance claims recognized in the Company’s Consolidated Balance Sheets is as follows:



(dollars in thousands)	DECEMBER 27, 2015			DECEMBER 28, 2014
Undiscounted reserves	$	63,791		$	64,157
Discount	(2,318		)	(1,780		)
Discounted reserves	$	61,473		$	62,377

Discounted reserves recognized in the Company’s Consolidated Balance Sheets:
Accrued and other current liabilities	$	20,824		$	19,455
Other long-term liabilities, net	40,649			42,922
	$	61,473		$	62,377