Annual Review 2012 - Luxottica
Annual Review 2012 - Luxottica
Annual Review 2012 - Luxottica
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Consolidated financial statements - NOTES<br />
| 167 ><br />
Rentals, leasing and licenses<br />
The Group leases through its worldwide subsidiaries various retail stores, plants, warehouses<br />
and office facilities as well as certain of its data processing and automotive equipment<br />
under operating lease arrangements. These agreements expire between 2013 and 2026<br />
and provide for renewal options under various conditions. The lease arrangements for the<br />
Group’s U.S. retail locations often include escalation clauses and provisions requiring the<br />
payment of incremental rentals, in addition to any established minimums contingent upon<br />
the achievement of specified levels of sales volume. The Group also operates departments<br />
in various host stores, paying occupancy costs solely as a percentage of sales. Certain<br />
agreements which provide for operations of departments in a major retail chain in the<br />
United States contain short-term cancellation clauses.<br />
Total rental expense for each year ended December 31 is as follows:<br />
(thousands of Euro) <strong>2012</strong> 2011<br />
Minimum lease payments 442,932 328,261<br />
Additional lease payments 99,377 90,876<br />
Sublease payments (25,754) (23,005)<br />
Total 516,555 396,132<br />
Future rental commitments, including contracted rent payments and contingent minimums,<br />
are as follows:<br />
Years ending December 31 (thousands of Euro)<br />
2013 296,411<br />
2014 248,805<br />
2015 197,620<br />
2016 152,929<br />
2017 108,925<br />
Subsequent years 186,951<br />
Total 1,191,460<br />
Other commitments<br />
The Group is committed to pay amounts in future periods for endorsement contracts,<br />
supplier purchase and other long-term commitments. Endorsement contracts are entered<br />
into with selected athletes and others who endorse Oakley products. Oakley is often<br />
required to pay specified minimal annual commitments and, in certain cases, additional<br />
amounts based on performance goals. Certain contracts provide additional incentives<br />
based on the achievement of specified goals. Supplier commitments have been entered<br />
into with various suppliers in the normal course of business. Other commitments mainly<br />
include auto, machinery and equipment lease commitments.
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