Commitments and Contingencies

License Agreements. The Company has various license agreements to market watches and jewelry bearing certain trademarks or patents owned by various third parties. In accordance with these agreements, the Company incurred royalty expense of approximately $243.5 million, $258.6 million and $214.1 million in fiscal years 2015, 2014 and 2013, respectively. These amounts are included in the Company's cost of sales or, if advertising related, in SG&A. These license agreements have expiration dates between fiscal years 2017 and 2025 which requires the Company to pay royalties ranging from 4% to 16% of defined net sales. The Company has future minimum royalty commitments through fiscal year 2019 under these license agreements as summarized below, by fiscal year (in thousands):



Fiscal Year	Minimum Royalty Commitments
2016	$	198,636
2017	80,320
2018	76,620
2019	8,260
Total	$	363,836

These minimum royalty commitments do not include amounts owed under these license agreements obligating the Company to pay the licensors a percentage of net sales of these licensed products.

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. Total rent expense under these agreements was approximately $186.1 million, $190.6 million and $143.8 million for fiscal years 2015, 2014 and 2013, respectively. Included in the Company's total rent expense was contingent rent expense of approximately $13.3 million, $14.1 million and $12.1 million for fiscal years 2015, 2014 and 2013, respectively. Capital leases are included as a component of short-term and current portion of long-term debt and in long-term debt in the Company's consolidated balance sheets. Future minimum rental commitments under non-cancelable leases, by fiscal year, are as follows (in thousands):



Fiscal Year	Operating Leases		Capital Leases
2016	$	151,013	$	1,392
2017	133,888		1,387
2018	116,918		1,104
2019	99,851		884
2020	86,193		881
Thereafter	264,464		1,313
	$	852,327	$	6,961
Less amounts representing interest at 1.9% to 10.8%			318
Capital lease obligations			$	6,643

Purchase Obligations. As of January 2, 2016, the Company had purchase obligations totaling $382.7 million.

Asset Retirement Obligations. ASC 410, Asset Retirement and Environmental Obligations requires (i) 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 (ii) 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 and retail store leases within the Americas, Europe and Asia segments.

The following table summarizes the changes in the Company's asset retirement obligations (in thousands):



Fiscal Year:	2015			2014
Beginning asset retirement obligation	$	8,925		$	8,306
Liabilities incurred during the period	509			1,587
Revisions in estimated retirement obligations	—			2
Liabilities settled during the period	(534		)	(860		)
Accretion expense	308			364
Currency translation	(314		)	(474		)
Ending asset retirement obligations	$	8,894		$	8,925

Litigation. The Company is occasionally subject to litigation or other legal proceedings in the normal course of its business. The Company does not believe that the outcome of any currently pending legal matters, individually or collectively, will have a material effect on the business or financial condition of the Company.