(10)

Commitments

Leases

The Company leases its office and warehouse facilities under operating leases which are subject to various step rent provisions, rent concessions and escalation clauses expiring at various dates through 2023. Escalation clauses are not material and have been excluded from minimum future annual rental payments. Rental expense, which is calculated on a straight-line basis, amounted to $10.8 million, $11.8 million and $12.7 million in 2013, 2012 and 2011, respectively. Minimum future annual rental payments are as follows:

2014	$	4,993
2015		4,888
2016		4,902
2017		4,581
2018		4,103
Thereafter		10,024
	$	33,491

License Agreements

The Company is party to a number of license and other agreements for the use of trademarks and rights in connection with the manufacture and sale of its products expiring at various dates through 2032. In connection with certain of these license agreements, the Company is subject to minimum annual advertising commitments, minimum annual royalties and other commitments as follows:

2014	$	102,123
2015		115,400
2016		120,843
2017		119,158
2018		121,627
Thereafter		540,209
	$	1,119,360

Future advertising commitments are estimated based on planned future sales for the license terms that were in effect at December 31, 2013, without consideration for potential renewal periods. The above figures do not reflect the fact that our distributors share our advertising obligations. Royalty expense included in selling, general, and administrative expenses, aggregated $40.5 million, $58.8 million and $51.3 million, in 2013, 2012 and 2011, respectively, and represented 7.2%, 9.0% and 8.3% of net sales for the years ended December 31, 2013, 2012 and 2011.