LensCrafters 2012 Annual Report Download - page 254

ANNUAL REPORT 2012> 168 |
Future minimum amounts to be paid for endorsement contracts and supplier purchase
commitments at December 31, 2012 are as follows:
Years ending December 31 (thousands of Euro)
Endorsement
contracts
Supply
commitments
Other
commitments
2013 6,626 18,504 6,889
2014 3,999 21,578 5,662
2015 3,725 12,045 2,136
2016 99 4,841 97
2017 - 4.401 -
Subsequent years - 16,889 -
Total 14,449 78,258 14,784
GUARANTEES
The United States Shoe Corporation, a wholly owned subsidiary within the Group, has
guaranteed the lease payments for five stores in the United Kingdom. These lease
agreements have varying termination dates through June 30, 2017. At December 31, 2012,
the Group’s maximum liability amounted to Euro2.6 million (Euro3.3 million at December
31, 2011).
A wholly owned U.S. subsidiary guaranteed future minimum lease payments for lease
agreements on certain stores. The lease agreements were signed directly by the franchisees
as part of certain franchising agreements. Total minimum guaranteed payments under
this guarantee were Euro 1.0 million (USD 1.3 million) at December 31, 2012 (Euro 1.4
million at December 31, 2011). The commitments provided for by the guarantee arise if the
franchisee cannot honor its financial commitments under the lease agreements. A liability
has been accrued using an expected present value calculation. Such amount is immaterial
to the consolidated financial statements as of December 31, 2012 and 2011.
LITIGATION
French Competition Authority Investigation
Our French subsidiary Luxottica France S.a.s., together with other major competitors in
the French eyewear industry, has been the subject of an anti-competition investigation
conducted by the French Competition Authority relating to pricing practices in such
industry. The investigation is ongoing, and, to date, no formal action has yet been
taken by the French Competition Authority. As a consequence, it is not possible to
estimate or provide a range of potential liability that may be involved in this matter. The
outcome of any such action, which the Group intends to vigorously defend, is inherently
uncertain, and there can be no assurance that such action, if adversely determined, will
not have a material adverse effect on our business, results of operations and financial
condition.