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 $190.0 million, $206.1 million and $243.5 million in fiscal years 2017, 2016 and 2015, 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 2018 and 2025 and require 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 follows by fiscal year (in thousands):



Fiscal Year	Minimum Royalty Commitments
2018	$	154,115
2019	8,086
2020	2,500
Total	$	164,701

These minimum royalty commitments do not include amounts owed under these license agreements for obligations of 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 $171.6 million, $188.7 million and $186.1 million for fiscal years 2017, 2016 and 2015, respectively. The Company's total rent expense included contingent rent expense of approximately $8.2 million, $10.5 million and $13.3 million for fiscal years 2017, 2016 and 2015, respectively. The Company includes capital leases as a component of short-term and current portion of long-term debt and long-term debt in the 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
2018	$	144,108	$	1,285
2019	124,176		1,056
2020	103,069		1,052
2021	85,064		1,045
2022	70,103		522
Thereafter	186,435		—
	$	712,955	$	4,960
Less amounts representing interest at 2.2% to 10.8%			117
Capital lease obligations			$	4,843

Purchase Obligations. As of December 30, 2017, the Company had purchase obligations totaling $357.3 million that consisted primarily of 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	2017			2016
Beginning asset retirement obligation	$	12,678		$	8,894
Liabilities incurred during the period	549			4,331
Liabilities settled during the period	(1,472		)	(684		)
Accretion expense	363			401
Currency translation	968			(264		)
Ending asset retirement obligations	$	13,086		$	12,678

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.