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Commitments And Contingencies
 12 Months Ended
Dec. 31, 2011
Commitments And Contingencies [Abstract]  
Commitments And Contingencies

13. Commitments and Contingencies

License Agreements. The Company has various license agreements to market watches bearing certain trademarks or patents owned by various third-parties. In accordance with these agreements, the Company incurred royalty expense of approximately $160.2 million, $109.4 million and $73.9 million in fiscal years 2011, 2010 and 2009, respectively. These amounts are included in the Company's cost of sales or if advertising related, selling and distribution expenses. At fiscal year end 2011, certain of the Company's significant license agreements had expiration dates between fiscal years 2013 and 2017. These license agreements require the Company to pay royalties ranging from 4% to 20% of defined net sales. Future minimum royalty commitments under these license agreements, by fiscal year, are as follows (in thousands):

 

2012

    $ 121,233   

2013

      90,666   

2014

      35,883   

2015

      24,140   

2016

      3,714   

Thereafter

      3,990   
  

 

 

  
   $ 279,626   
  

 

 

  

 

Leases. The Company leases its retail and outlet store facilities as well as certain of its office and warehouse facilities and equipment under non-cancelable operating leases and capital leases. Most of the retail and outlet store leases provide for contingent rental payments based on operating results and require the payment of taxes, insurance and other costs applicable to the property. Generally, these leases include renewal options for various periods at stipulated rates. Rent expense under these agreements was approximately $107.3 million, $88.6 million and $77.6 million for fiscal years 2011, 2010 and 2009, respectively. Contingent rent expense was approximately $9.0 million, $3.8 million and $1.8 million for fiscal years 2011, 2010 and 2009, respectively. Future minimum rental commitments under non-cancelable leases, by fiscal year, are as follows (in thousands):

 

     Operating Leases      Capital Leases  

2012

    $ 103,177       $ 701   

2013

      98,167         1,309   

2014

      87,513         1,163   

2015

      79,096         1,080   

2016

      72,323         1,078   

Thereafter

      198,581         5,616   
  

 

 

     

 

 

  
   $ 638,857       $ 10,947   
  

 

 

     

 

 

  

Less amounts representing interest

         (1,110 ) 
     

 

 

  

Capital lease obligations, included in short-term debt and in other long-term debt

       $ 9,837   
     

 

 

  

Purchase Obligations. As of December 31, 2011, the Company had purchase obligations totaling $281.5 million.

Asset Retirement Obligations. ASC 410, Asset Retirement and Environmental Obligations ("ASC 410") requires that the fair value of a liability for an asset retirement obligation be recognized in the period in which it is incurred if a reasonable estimate of fair value can be made and that the associated asset retirement costs be capitalized as part of the carrying amount of the long-lived asset. The Company's asset retirement obligations relate to costs associated with the retirement of leasehold improvements under office leases within the Europe wholesale segment and the Asia Pacific wholesale segment and under retail store leases within the Direct to consumer segment. The Company had asset retirement obligations of $4.1 million as of December 31, 2011.

Litigation. The Company is occasionally subject to litigation or other legal proceedings in the normal course of its business. On August 5, 2011, the Company settled the three shareholder derivative lawsuits that were filed in the United States District Court for the Northern District of Texas, Dallas Division, naming the Company as a nominal defendant and naming all of the Company's then current directors and certain of its current and former officers and directors as defendants. The lawsuits alleged purported violations of federal securities laws and state law claims for breach of fiduciary duty, abuse of control, constructive fraud, corporate waste, unjust enrichment and gross mismanagement in connection with certain stock option grants made by the Company. The settlement provided in part for the following: (i) payment to the Company of approximately $8.7 million by the insurance carriers for the individual defendants; (ii) the adoption or maintenance by the Company of certain corporate governance measures; and (iii) in payment of plaintiff's counsel's fees and expenses (a) the issuance by the Company to plaintiff's counsel of approximately $7.8 million in shares of the Company's common stock and (b) the granting to plaintiff's counsel of a stock option to acquire up to 32,000 shares of the Company's common stock.

The Company does not believe that the outcome of any currently pending legal matters, individually or collectively, will have a material effect on the results of operations or financial condition of the Company.