Reportable Operating Segments

The Company performs an annual assessment of the appropriateness of its reportable operating segments during the third quarter of its fiscal year. However, due to known circumstances arising during the three months ended June 30, 2018, management performed this assessment during this period. These circumstances included quantitative factors, such as the actual and forecasted sales and operating income of the wholesale operations of the HOKA brand compared to the Company's other reportable operating segments, as well as qualitative factors such as the ongoing growth of, and the Company's increased investment in, the wholesale operations of the HOKA brand. As a result, beginning in the first quarter of fiscal year 2019, the Company added a sixth reportable operating segment to separately report the wholesale operations of the HOKA brand. The wholesale operations of the HOKA brand are no longer presented under the Other brands wholesale reportable operating segment. However, the DTC operations of the HOKA brand continue to be reported under the DTC reportable operating segment. Prior periods presented were reclassified to reflect this change.

The Company's six reportable operating segments now include the worldwide wholesale operations for each of the UGG brand, HOKA brand, Teva brand, Sanuk brand, and Other brands, as well as DTC. The Other brands wholesale reportable operating segment consists of the Koolaburra brand and includes other discontinued brands in the prior periods presented. Information reported to the CODM, who is the Company's Principal Executive Officer, is organized into these reportable operating segments and is consistent with how the CODM evaluates performance and allocates resources. The Company does not consider international operations a separate reportable operating segment, and the CODM reviews such operations in the aggregate with the aforementioned reportable operating segments. Inter-segment sales from the Company’s wholesale reportable operating segments to the DTC reportable operating segment are at the Company’s cost, and there is no inter-segment profit on these inter-segment sales, nor are they reflected in income (loss) from operations of the wholesale reportable operating segments.

The Company evaluates reportable operating segment performance, primarily based on net sales and income (loss) from operations. The wholesale operations of each brand are managed separately because each requires different marketing, research and development, design, sourcing, and sales strategies. The income (loss) from operations for each of the reportable operating segments include only those costs which are specifically related to each reportable operating segment, which consist primarily of cost of sales, research and development, design, sales and marketing, depreciation, amortization, and directly related costs of employees and their respective expenses. The Company does not allocate corporate overhead costs or non-operating income and expenses to reportable operating segments, which include unallocable overhead costs associated with distribution centers, certain executive and stock compensation, accounting, finance, legal, information technology, human resources, and facilities, among others.

Reportable operating segment information, with a reconciliation to the condensed consolidated statements of comprehensive income, is summarized as follows:



	Three Months Ended September 30,				Six Months Ended September 30,
	2018		2017		2018		2017
Net sales
UGG brand wholesale	$	319,589	$	322,050	$	400,942	$	385,323
HOKA brand wholesale	43,561		35,699		83,515		62,237
Teva brand wholesale	15,878		16,494		49,074		48,617
Sanuk brand wholesale	10,933		12,087		31,436		34,307
Other brands wholesale	18,064		4,822		20,701		5,249
Direct-to-Consumer	93,888		91,308		166,839		156,444
Total	$	501,913	$	482,460	$	752,507	$	692,177



	Three Months Ended September 30,						Six Months Ended September 30,
	2018			2017			2018			2017
Income (loss) from operations
UGG brand wholesale	$	134,029		$	117,218		$	139,898		$	116,197
HOKA brand wholesale	8,170			7,549			13,898			8,809
Teva brand wholesale	1,847			1,916			9,911			6,859
Sanuk brand wholesale	291			1,228			4,491			5,645
Other brands wholesale	5,287			494			5,637			260
Direct-to-Consumer	2,975			(3,403		)	(4,449		)	(15,505		)
Unallocated overhead costs	(62,187		)	(57,647		)	(118,388		)	(111,166		)
Total	$	90,412		$	67,355		$	50,998		$	11,099

Assets allocated to each reportable operating segment include accounts receivable, net of allowances and inventory, net of reserves, fixed assets, goodwill, other intangible assets, and certain other assets that are specifically identifiable for one of the Company's reportable operating segments. Unallocated assets are those assets not directly related to a specific reportable operating segment and generally include cash and cash equivalents, deferred tax assets, and various other corporate assets shared by the Company's reportable operating segments.

Assets allocated to each reportable operating segment, with a reconciliation to the condensed consolidated balance sheets, are as follows:



	September 30, 2018		March 31, 2018
Assets
UGG brand wholesale	$	661,623	$	229,894
HOKA brand wholesale	71,919		65,943
Teva brand wholesale	46,021		85,980
Sanuk brand wholesale	52,646		79,322
Other brands wholesale	41,666		8,866
Direct-to-Consumer	103,741		112,355
Total assets from reportable operating segments	977,616		582,360
Unallocated cash and cash equivalents	182,192		429,970
Unallocated deferred tax assets	38,878		38,381
Unallocated other corporate assets	225,282		213,668
Total	$	1,423,968	$	1,264,379