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 $206.1 million, $243.5 million and $258.6 million in fiscal years 2016, 2015 and 2014, 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 5% to 15% of defined net sales. The Company has future minimum royalty commitments through fiscal year 2020 under these license agreements as summarized below, by fiscal year (in thousands):



Fiscal Year	Minimum Royalty Commitments
2017	$	160,577
2018	68,304
2019	7,870
2020	2,500
Total	$	239,251

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 $188.7 million, $186.1 million and $190.6 million for fiscal years 2016, 2015 and 2014, respectively. Included in the Company's total rent expense was contingent rent expense of approximately $10.5 million, $13.3 million and $14.1 million for fiscal years 2016, 2015 and 2014, 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
2017	$	149,364	$	1,435
2018	130,990		1,146
2019	110,800		926
2020	94,532		923
2021	80,487		917
Thereafter	233,684		230
	$	799,857	$	5,577
Less amounts representing interest at 3.0% to 10.8%			159
Capital lease obligations			$	5,418

Purchase Obligations. As of December 31, 2016, the Company had purchase obligations totaling $442.5 million that consisted primarily of outstanding letters of credit, which represent inventory purchase commitments that typically mature in one to eight months and open non-cancelable purchase orders.

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:	2016			2015
Beginning asset retirement obligation	$	8,894		$	8,925
Liabilities incurred during the period	4,331			509
Liabilities settled during the period	(684		)	(534		)
Accretion expense	401			308
Currency translation	(264		)	(314		)
Ending asset retirement obligations	$	12,678		$	8,894

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.

Sale-leaseback. During fiscal year 2016, the Company entered into a sale-leaseback agreement for its approximately 518,000 square foot warehouse and distribution center in Dallas, Texas. The sales price was $33.0 million. The transaction resulted in a gain of $6.7 million net of taxes and fees and a deferred gain of $13.2 million to be amortized to rent expense over the initial lease term. The leaseback has a 10-year term with two 5-year renewal options and is classified as an operating lease.