Commitments and Contingencies

Leases

The Company leases office space, retail stores and warehouse space under operating lease agreements that expire at various dates through September 2043. In addition to minimum rental payments, the leases require payment of increases in real estate taxes and other expenses incidental to the use of the property.

Rent expense for the Company’s operating leases consists of the following (in millions):



	Fiscal Years Ended
	March 30, 2019		March 31, 2018		April 1, 2017
Minimum rentals	$	357	$	272	$	257
Contingent rent	109		80		76
Total rent expense	$	466	$	352	$	333

Future minimum lease payments under the terms of these noncancelable operating lease agreements are as follows (in millions):



Fiscal years ending:
Fiscal 2020	$	431
Fiscal 2021	389
Fiscal 2022	339
Fiscal 2023	277
Fiscal 2024	229
Fiscal 2025 and thereafter	509
	$	2,174

As of March 30, 2019, the future minimum lease payments in the table above were reduced by total noncancelable future sublease rental income of $42 million.

The Company has issued stand-by letters of credit to guarantee certain of its retail and corporate operating lease commitments, aggregating $18 million at March 30, 2019, including $17 million in letters of credit issued under the 2018 Credit Facility.

Other Commitments

As of March 30, 2019, the Company also has other contractual commitments aggregating $3.529 billion, which consist of inventory purchase commitments of $865 million, debt obligations of $2.566 billion and other contractual obligations of $98 million, which primarily relate to obligations related to the Company’s marketing and advertising agreements, information technology agreements and supply agreements.

Long-term Employment Contract

The Company has an employment agreement with the Chief Creative Officer of the Michael Kors brand that provides for continuous employment through the date of the officer’s death or permanent disability at an annual salary of $1 million. In addition to salary, the agreement provides for an annual bonus and other employee related benefits.

Contingencies

In the ordinary course of business, the Company is party to various legal proceedings and claims. Although the outcome of such items cannot be determined with certainty, the Company’s management does not believe that the outcome of all pending legal proceedings in the aggregate will have a material adverse effect on its cash flow, results of operations or financial position.