Leases and Other Commitments

9 Months Ended

Dec. 31, 2020

Commitments and Contingencies Disclosure [Abstract]

Leases and Other Commitments

Leases and Other Commitments

Leases

The Company primarily leases retail stores, showrooms, offices, and distribution facilities under operating lease contracts. Some of the Company's operating leases contain extension options ranging from one to 15 years. Historically, the Company has not entered into finance leases and its lease agreements generally do not contain residual value guarantees, options to purchase underlying assets, or material restrictive covenants.

Supplemental information for amounts presented in the condensed consolidated statements of cash flows related to operating leases is as follows:

	Three Months Ended December 31,				Nine Months Ended December 31,
	2020		2019		2020		2019
Non-cash operating activities
Operating lease assets obtained in exchange for lease liabilities*	$	1,013	$	827	$	6,882	$	28,964
Reductions to operating lease assets for reductions to lease liabilities*	(9,206)		(616)		(11,619)		(5,285)

*Amounts disclosed include non-cash additions or reductions resulting from lease remeasurements.

Purchase Obligations

During the nine months ended December 31, 2020, the Company entered into a logistics and transportation services agreement with a new warehouse partner in Europe, intended to replace an existing services agreement with another provider, for a five-year initial term, and the Company expects its future minimum commitments under this agreement to be approximately $40,000.

Litigation

From time to time, the Company is involved in various legal proceedings and claims arising in the ordinary course of business. Although the results of legal proceedings and claims cannot be predicted with certainty, the Company currently believes that the final outcome of these ordinary course matters, including the matter outlined below, will not, individually or in the aggregate, have a material adverse effect on it business, results of operations, financial condition, or liquidity.

On March 28, 2016, the Company filed a lawsuit alleging trademark infringement, patent infringement, unfair competition and violation of deceptive trade practices in the US District Court for the Northern District of Illinois Eastern Division (District Court) against Australian Leather. Australian Leather counterclaimed alleging that the UGG trademark is invalid. On May 10, 2019, a jury returned a verdict in the Company's favor in its lawsuit against Australian Leather. The District Court entered judgments upholding the UGG trademark on February 6 and June 8, 2020. On August 12, 2020, Australian Leather filed an appeal to the US Court of Appeals for the Federal Circuit. While the Company believes there is no merit to the appeal, a judgment invalidating the UGG brand trademark would have a material adverse effect on the Company's business.

Leases and Other Commitments

Leases and Other Commitments

Leases

The Company primarily leases retail stores, showrooms, offices, and distribution facilities under operating lease contracts. Some of the Company's operating leases contain extension options ranging from one to 15 years. Historically, the Company has not entered into finance leases and its lease agreements generally do not contain residual value guarantees, options to purchase underlying assets, or material restrictive covenants.

Supplemental information for amounts presented in the condensed consolidated statements of cash flows related to operating leases is as follows:

	Three Months Ended December 31,				Nine Months Ended December 31,
	2020		2019		2020		2019
Non-cash operating activities
Operating lease assets obtained in exchange for lease liabilities*	$	1,013	$	827	$	6,882	$	28,964
Reductions to operating lease assets for reductions to lease liabilities*	(9,206)		(616)		(11,619)		(5,285)

*Amounts disclosed include non-cash additions or reductions resulting from lease remeasurements.

Purchase Obligations

During the nine months ended December 31, 2020, the Company entered into a logistics and transportation services agreement with a new warehouse partner in Europe, intended to replace an existing services agreement with another provider, for a five-year initial term, and the Company expects its future minimum commitments under this agreement to be approximately $40,000.

Litigation

From time to time, the Company is involved in various legal proceedings and claims arising in the ordinary course of business. Although the results of legal proceedings and claims cannot be predicted with certainty, the Company currently believes that the final outcome of these ordinary course matters, including the matter outlined below, will not, individually or in the aggregate, have a material adverse effect on it business, results of operations, financial condition, or liquidity.

On March 28, 2016, the Company filed a lawsuit alleging trademark infringement, patent infringement, unfair competition and violation of deceptive trade practices in the US District Court for the Northern District of Illinois Eastern Division (District Court) against Australian Leather. Australian Leather counterclaimed alleging that the UGG trademark is invalid. On May 10, 2019, a jury returned a verdict in the Company's favor in its lawsuit against Australian Leather. The District Court entered judgments upholding the UGG trademark on February 6 and June 8, 2020. On August 12, 2020, Australian Leather filed an appeal to the US Court of Appeals for the Federal Circuit. While the Company believes there is no merit to the appeal, a judgment invalidating the UGG brand trademark would have a material adverse effect on the Company's business.