DECKERS OUTDOOR CORP, 10-K filed on 6/1/2015
Annual Report
Document and Entity Information (USD $)
12 Months Ended
Mar. 31, 2015
May 15, 2015
Sep. 30, 2014
Document and Entity Information
 
 
 
Entity Registrant Name
DECKERS OUTDOOR CORP 
 
 
Entity Central Index Key
0000910521 
 
 
Document Type
10-K 
 
 
Document Period End Date
Mar. 31, 2015 
 
 
Amendment Flag
false 
 
 
Current Fiscal Year End Date
--03-31 
 
 
Entity Well-known Seasoned Issuer
Yes 
 
 
Entity Voluntary Filers
No 
 
 
Entity Current Reporting Status
Yes 
 
 
Entity Filer Category
Large Accelerated Filer 
 
 
Entity Public Float
 
 
$ 3,280,043,169 
Entity Common Stock, Shares Outstanding
 
33,296,968 
 
Document Fiscal Year Focus
2015 
 
 
Document Fiscal Period Focus
FY 
 
 
CONSOLIDATED BALANCE SHEETS (USD $)
In Thousands, unless otherwise specified
Mar. 31, 2015
Mar. 31, 2014
Dec. 31, 2013
Current assets:
 
 
 
Cash and cash equivalents
$ 225,143 
$ 245,088 
$ 237,125 
Trade accounts receivable, net of allowances ($18,218 at March 31, 2015, $15,569 at March 31, 2014 and $25,068 at December 31, 2013)
143,105 
106,199 
184,013 
Inventories
238,911 
211,519 
260,791 
Prepaid expenses
15,141 
12,067 
14,980 
Other current assets
35,057 
27,118 
112,514 
Deferred tax assets
14,066 
21,871 
19,881 
Income tax receivable
15,170 
0 
0 
Total current assets
686,593 
623,862 
829,304 
Property and equipment, net of accumulated depreciation ($129,002 at March 31, 2015, $103,090 at March 31, 2014 and $99,473 at December 31, 2013)
232,317 
184,570 
174,066 
Goodwill
127,934 
127,934 
128,725 
Other intangible assets, net of accumulated amortization ($37,316 at March 31, 2015, $26,026 at March 31, 2014 and $24,140 at December 31, 2013)
87,743 
91,411 
93,278 
Deferred tax assets
15,017 
17,062 
15,751 
Other assets
20,329 
19,365 
18,605 
Total assets
1,169,933 
1,064,204 
1,259,729 
Current liabilities:
 
 
 
Short-term borrowings
5,383 
6,702 
9,728 
Trade accounts payable
85,714 
76,139 
151,037 
Accrued payroll
27,300 
22,927 
35,725 
Other accrued expenses
41,066 
11,624 
45,301 
Income taxes payable
6,858 
2,908 
49,453 
Value added tax (VAT) payable
1,221 
1,915 
29,274 
Total current liabilities
167,542 
122,215 
320,518 
Long-term liabilities:
 
 
 
Mortgage payable
33,154 
0 
0 
Income tax liability
5,087 
0 
0 
Deferred rent obligations
15,663 
14,319 
12,206 
Other long-term liabilities
11,475 
38,821 
38,886 
Total long-term liabilities
65,379 
53,140 
51,092 
Commitments and contingencies (Note 6)
   
   
   
Stockholders' equity:
 
 
 
Common stock ($0.01 par value; 125,000 shares authorized; shares issued and outstanding of 33,292 at March 31, 2015, 34,624 at March 31, 2014 and 34,618 shares at December 31, 2013)
333 
346 
346 
Additional paid-in capital
158,777 
146,731 
143,916 
Retained earnings
798,370 
743,815 
746,500 
Accumulated other comprehensive loss
(20,468)
(2,043)
(2,643)
Total stockholders' equity
937,012 
888,849 
888,119 
Total liabilities and stockholders' equity
$ 1,169,933 
$ 1,064,204 
$ 1,259,729 
CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $)
In Thousands, except Share data, unless otherwise specified
Mar. 31, 2015
Mar. 31, 2014
Dec. 31, 2013
Statement of Financial Position [Abstract]
 
 
 
Trade accounts receivable, allowances (in dollars)
$ 18,218 
$ 15,569 
$ 25,068 
Accumulated depreciation
129,002 
103,090 
99,473 
Accumulated amortization
$ 37,316 
$ 26,026 
$ 24,140 
Common stock, par value (in dollars per share)
$ 0.01 
$ 0.01 
$ 0.01 
Common stock, authorized shares
125,000,000 
125,000,000 
125,000,000 
Common stock, issued shares
33,292,000 
34,624,000 
34,618,000 
Common stock, outstanding shares
33,292,000 
34,624,000 
34,618,000 
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (USD $)
In Thousands, except Per Share data, unless otherwise specified
3 Months Ended 12 Months Ended
Mar. 31, 2014
Mar. 31, 2015
Dec. 31, 2013
Dec. 31, 2012
Income Statement [Abstract]
 
 
 
 
Net sales
$ 294,716 
$ 1,817,057 
$ 1,556,618 
$ 1,414,398 
Cost of sales
150,456 
938,949 
820,135 
782,244 
Gross profit
144,260 
878,108 
736,483 
632,154 
Selling, general and administrative (SG&A) expenses
144,668 
653,689 
528,586 
445,206 
Income (loss) from operations
(408)
224,419 
207,897 
186,948 
Other expense (income), net:
 
 
 
 
Interest income
(65)
(207)
(60)
(217)
Interest expense
516 
4,220 
3,079 
3,840 
Other, net
(117)
(733)
(679)
(793)
Total other expense, net
334 
3,280 
2,340 
2,830 
Income (loss) before income taxes
(742)
221,139 
205,557 
184,118 
Income taxes
1,943 
59,359 
59,868 
55,104 
Net income (loss)
(2,685)
161,780 
145,689 
129,014 
Other comprehensive income (loss), net of tax:
 
 
 
 
Unrealized gain (loss) on foreign currency hedging
(273)
450 
(486)
(633)
Foreign currency translation adjustment
873 
(18,875)
(757)
963 
Total other comprehensive (loss) income
600 
(18,425)
(1,243)
330 
Comprehensive income (loss)
(2,085)
143,355 
144,446 
129,344 
Net income (loss) attributable to:
 
 
 
 
Deckers Outdoor Corporation
(2,685)
161,780 
145,689 
128,866 
Noncontrolling interest
0 
0 
0 
148 
Net income (loss)
(2,685)
161,780 
145,689 
129,014 
Comprehensive income (loss) attributable to:
 
 
 
 
Deckers Outdoor Corporation
(2,085)
143,355 
144,446 
129,196 
Noncontrolling interest
0 
0 
0 
148 
Comprehensive income (loss)
$ (2,085)
$ 143,355 
$ 144,446 
$ 129,344 
Net income (loss) per share attributable to Deckers Outdoor Corporation common stockholders:
 
 
 
 
Basic (in dollars per share)
$ (0.08)
$ 4.70 
$ 4.23 
$ 3.49 
Diluted (in dollars per share)
$ (0.08)
$ 4.66 
$ 4.18 
$ 3.45 
Weighted-average common shares outstanding:
 
 
 
 
Basic (in shares)
34,621 
34,433 
34,473 
36,879 
Diluted (in shares)
34,621 
34,733 
34,829 
37,334 
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (USD $)
In Thousands, unless otherwise specified
Total
Total Deckers Outdoor Corp. Stockholders' Equity
Common Stock
Additional Paid-in Capital
Retained Earnings
Accumulated Other Comprehensive Income (Loss)
Non-controlling Interest
Balance at Dec. 31, 2011
$ 841,430 
$ 835,936 
$ 387 
$ 144,684 
$ 692,595 
$ (1,730)
$ 5,494 
Balance (in shares) at Dec. 31, 2011
 
 
38,692 
 
 
 
 
Increase (Decrease) in Stockholders' Equity
 
 
 
 
 
 
 
Stock compensation expense
 
14,661 
 
14,661 
 
 
 
Compensation expenses recorded
14,661 
 
 
 
 
 
 
Stock compensation expense (in shares)
 
 
19 
 
 
 
 
Exercise of stock options
9 
9 
 
9 
 
 
 
Exercise of stock options (in shares)
 
 
4 
 
 
 
 
Shares issued upon vesting
 
 
2 
(2)
 
 
 
Shares issued upon vesting (in shares)
 
 
199 
 
 
 
 
Excess tax benefit from stock compensation
(381)
(381)
 
(381)
 
 
 
Shares withheld for taxes
(5,888)
(5,888)
 
(5,888)
 
 
 
Stock repurchase
(220,695)
(220,695)
(45)
 
(220,650)
 
 
Stock repurchase (in shares)
 
 
(4,514)
 
 
 
 
Net income (loss)
129,014 
128,866 
 
 
128,866 
 
148 
Acquisition of noncontrolling interest
(19,679)
(14,037)
 
(14,037)
 
 
(5,642)
Total other comprehensive income (loss)
330 
330 
 
 
 
 
 
Balance at Dec. 31, 2012
738,801 
738,801 
344 
139,046 
600,811 
(1,400)
0 
Balance (in shares) at Dec. 31, 2012
 
 
34,400 
 
 
 
 
Increase (Decrease) in Stockholders' Equity
 
 
 
 
 
 
 
Stock compensation expense
 
13,136 
 
13,136 
 
 
 
Compensation expenses recorded
13,136 
 
 
 
 
 
 
Stock compensation expense (in shares)
 
 
15 
 
 
 
 
Exercise of stock options
52 
52 
 
52 
 
 
 
Exercise of stock options (in shares)
 
 
8 
 
 
 
 
Shares issued upon vesting
 
 
2 
(2)
 
 
 
Shares issued upon vesting (in shares)
 
 
195 
 
 
 
 
Excess tax benefit from stock compensation
319 
319 
 
319 
 
 
 
Shares withheld for taxes
(8,635)
(8,635)
 
(8,635)
 
 
 
Net income (loss)
145,689 
145,689 
 
 
145,689 
 
0 
Total other comprehensive income (loss)
(1,243)
(1,243)
 
 
 
 
 
Balance at Dec. 31, 2013
888,119 
888,119 
346 
143,916 
746,500 
(2,643)
0 
Balance (in shares) at Dec. 31, 2013
 
 
34,618 
 
 
 
 
Increase (Decrease) in Stockholders' Equity
 
 
 
 
 
 
 
Stock compensation expense
 
2,865 
 
2,865 
 
 
 
Compensation expenses recorded
2,865 
 
 
 
 
 
 
Stock compensation expense (in shares)
 
 
5 
 
 
 
 
Shares issued upon vesting
 
 
0 
0 
 
 
 
Shares issued upon vesting (in shares)
 
 
1 
 
 
 
 
Shares withheld for taxes
(50)
(50)
 
(50)
 
 
 
Net income (loss)
(2,685)
(2,685)
 
 
(2,685)
 
0 
Total other comprehensive income (loss)
600 
600 
 
 
 
 
 
Balance at Mar. 31, 2014
888,849 
888,849 
346 
146,731 
743,815 
(2,043)
0 
Balance (in shares) at Mar. 31, 2014
 
 
34,624 
 
 
 
 
Increase (Decrease) in Stockholders' Equity
 
 
 
 
 
 
 
Stock compensation expense
 
13,524 
 
13,524 
0 
0 
0 
Compensation expenses recorded
13,524 
 
 
 
 
 
 
Stock compensation expense (in shares)
 
 
11 
 
 
 
 
Shares issued upon vesting
 
 
1 
(1)
 
 
 
Shares issued upon vesting (in shares)
 
 
93 
 
 
 
 
Excess tax benefit from stock compensation
4,197 
4,197 
 
4,197 
 
 
 
Shares withheld for taxes
(5,674)
(5,674)
 
(5,674)
 
 
 
Stock repurchase
(107,239)
(107,239)
(14)
 
(107,225)
 
 
Stock repurchase (in shares)
 
 
(1,436)
 
 
 
 
Net income (loss)
161,780 
161,780 
 
 
161,780 
 
0 
Total other comprehensive income (loss)
(18,425)
(18,425)
 
 
 
 
 
Balance at Mar. 31, 2015
$ 937,012 
$ 937,012 
$ 333 
$ 158,777 
$ 798,370 
$ (20,468)
$ 0 
Balance (in shares) at Mar. 31, 2015
 
 
33,292 
 
 
 
 
CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $)
In Thousands, unless otherwise specified
3 Months Ended 12 Months Ended
Mar. 31, 2014
Mar. 31, 2015
Dec. 31, 2013
Dec. 31, 2012
Cash flows from operating activities:
 
 
 
 
Net income (loss)
$ (2,685)
$ 161,780 
$ 145,689 
$ 129,014 
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
 
 
 
 
Depreciation, amortization and accretion
10,569 
49,293 
41,439 
33,367 
Change in fair value of contingent consideration
705 
(3,574)
1,815 
8,659 
Provision for (recovery of) doubtful accounts, net
169 
(1,107)
(125)
(2,128)
Deferred tax provision
(2,736)
9,970 
(4,092)
(5,657)
Stock compensation
2,865 
13,524 
13,136 
14,661 
Other
111 
2,969 
1,306 
1,229 
Changes in operating assets and liabilities, net of assets and liabilities acquired in the acquisition of businesses:
 
 
 
 
Trade accounts receivable
77,983 
(36,885)
6,618 
491 
Inventories
49,272 
(26,748)
40,580 
(46,903)
Prepaid expenses and other current assets
68,837 
(10,376)
(58,554)
23,511 
Income tax receivable
0 
(15,170)
0 
0 
Other assets
(758)
(144)
(4,290)
(3,028)
Trade accounts payable
(74,898)
8,912 
21,251 
18,932 
Contingent consideration
(2,974)
(364)
(6,458)
(959)
Accrued expenses
(33,666)
3,761 
33,556 
(9,983)
Income taxes payable
(46,545)
4,883 
24,386 
(5,820)
Long-term liabilities
1,998 
6,716 
5,618 
4,264 
Net cash provided by operating activities
47,909 
169,654 
262,125 
163,906 
Cash flows from investing activities:
 
 
 
 
Purchases of property and equipment
(17,603)
(91,147)
(79,829)
(61,575)
Acquisitions of businesses and equity method investment
0 
0 
0 
(8,829)
Purchases of intangibles and other assets, net
(30)
(9,489)
(5,368)
(4,958)
Net cash used in investing activities
(17,633)
(100,636)
(85,197)
(75,362)
Cash flows from financing activities:
 
 
 
 
Proceeds from issuance of short-term borrowings
0 
199,784 
320,728 
307,000 
Repayments of short-term borrowings
(3,000)
(201,705)
(344,000)
(274,000)
Cash paid for shares withheld for taxes
(3,752)
(5,674)
(6,736)
(6,535)
Excess tax benefit from stock compensation
0 
4,197 
2,071 
2,457 
Cash received from issuances of common stock
0 
 
52 
0 
Loan origination costs on short-term borrowings
0 
(818)
0 
(1,807)
Contingent consideration paid
(15,852)
(115)
(22,628)
(29,041)
Cash paid for noncontrolling interest
 
0 
 
(20,000)
Cash paid for repurchases of common stock
0 
(107,239)
0 
(220,695)
Proceeds from mortgage loan
0 
33,931 
0 
0 
Mortgage loan origination costs
 
(338)
 
 
Repayment of mortgage principal
0 
(283)
0 
0 
Net cash used in financing activities
(22,604)
(78,260)
(50,513)
(242,621)
Effect of exchange rates on cash
291 
(10,703)
463 
718 
Net change in cash and cash equivalents
7,963 
(19,945)
126,878 
(153,359)
Cash and cash equivalents at beginning of period
237,125 
245,088 
110,247 
263,606 
Cash and cash equivalents at end of period
245,088 
225,143 
237,125 
110,247 
Cash paid during the period for:
 
 
 
 
Income taxes
48,040 
53,504 
39,122 
66,899 
Interest
187 
2,674 
2,586 
3,338 
Non-cash investing and financing activity:
 
 
 
 
Deferred purchase payments for acquisition of business
0 
0 
0 
3,671 
Accruals for purchases of property and equipment
4,265 
3,419 
2,283 
489 
Contingent consideration arrangement for acquisition of business
0 
0 
0 
1,128 
Accruals for asset retirement obligations
19 
786 
1,936 
526 
Accruals for shares withheld for taxes
0 
0 
3,702 
1,804 
Write-off for shares exercised with a tax deficit
$ 0 
$ 0 
$ 1,752 
$ 2,838 
The Company and Summary of Significant Accounting Policies
The Company and Summary of Significant Accounting Policies
The Company and Summary of Significant Accounting Policies
The Company and Basis of Presentation
The consolidated financial statements include the accounts of Deckers Outdoor Corporation and its wholly-owned subsidiaries (collectively referred to as the "Company"). Accordingly, all references herein to Deckers Outdoor Corporation or "Deckers" include the consolidated results of the Company and its subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.
Deckers Outdoor Corporation is a global leader in designing, marketing and distributing innovative footwear, apparel and accessories developed for both everyday casual lifestyle use and high performance activities.  The Company's business is seasonal, with the highest percentage of UGG® brand net sales occurring in the quarters ending September 30 and December 31 and the highest percentage of Teva® and Sanuk® brand net sales occurring in the quarters ending March 31 and June 30 of each year. The other brands do not have a significant seasonal impact on the Company.
Prior to April 2, 2012, the Company owned 51% of a joint venture with an affiliate of Stella International Holdings Limited (Stella International) for the primary purpose of opening and operating retail stores for the UGG brand in China. Stella International is also one of the Company's major manufacturers in China. On April 2, 2012, the Company purchased the 49% noncontrolling interest owned by Stella International for a total purchase price of approximately $20,000. The Company accounted for this transaction as an acquisition of the remaining interest of an entity that had already been majority-owned by the Company. The purchase resulted in a reduction to additional paid in capital of $14,037 representing excess purchase price over the carrying amount of the noncontrolling interest. Prior to this purchase, the Company already had a controlling interest in this entity, and therefore, the subsidiary had been and continues to be consolidated with the Company's operations.
In May 2012, the Company purchased a noncontrolling interest in the Hoka One One® (Hoka) brand, a privately held footwear company, which was accounted for as an equity method investment. In September 2012, the Company acquired the remaining ownership interest in Hoka. The acquisition of Hoka was not material to the Company’s consolidated financial statements and does not have a significant seasonal impact on the Company.
In February 2014, our Board of Directors approved a change in the Company's fiscal year end from December 31 to March 31. The change was intended to better align the Company's planning, financial and reporting functions with the seasonality of the business. The 2015, 2013 and 2012 fiscal years ended on March 31, 2015, December 31, 2013 and December 31, 2012, respectively. The transition period was the quarter ended March 31, 2014 to coincide with the change in our fiscal year end.
In July 2014, the Company acquired its UGG brand distributor that sold to retailers in Germany and now operates a wholesale business in Germany through the newly acquired subsidiary. The acquisition included certain intangible and tangible assets and the assumption of liabilities. The purchase price of the acquisition was not material to the Company’s consolidated financial statements.
In April 2015, the Company acquired inventory and certain intangible assets, including the trade name related to the Koolaburra® brand, a sheepskin and wool based footwear brand. The purchase price of the acquisition was not material to the Company’s consolidated financial statements.
  
We sell our brands through quality domestic retailers and international distributors and retailers, as well as directly to our end-user consumers through our E-Commerce business and retail stores. Independent third parties manufacture all of our products.
Inventories
Inventories, principally finished goods, are stated at the lower of cost (first-in, first-out) or market (net realizable value). Cost includes initial molds and tooling that are amortized over the life of the mold in cost of sales. Cost also includes shipping and handling fees and costs, which are subsequently expensed to cost of sales. Market values are determined by historical experience with discounted sales, industry trends, and the retail environment.
Revenue Recognition
The Company recognizes wholesale, E-Commerce, and international distributor revenue when products are shipped and retail revenue at the point of sale. All sales are recognized when the customer takes title and assumes risk of loss, collection of the related receivable is reasonably assured, persuasive evidence of an arrangement exists, and the sales price is fixed or determinable. For wholesale and international distributor sales, allowances for estimated returns, discounts, chargebacks, and bad debts are provided for when related revenue is recorded. For E-Commerce sales, allowances for estimated returns and bad debts are provided for when related revenue is recorded. For retail sales, allowances for estimated returns are provided for when related revenue is recorded. Amounts billed for shipping and handling costs are recorded as a component of net sales, while the related costs paid to third-party shipping companies are recorded as a cost of sales. The Company presents revenue net of taxes collected from customers and remitted to governmental authorities.
Accounting for Long-Lived Assets
Other long-lived assets, such as machinery and equipment, leasehold improvements, and purchased intangibles subject to amortization, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount to estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount exceeds the estimated future cash flows, an impairment charge is recognized for the amount by which the carrying amount exceeds the fair value of the asset. Intangible assets subject to amortization are amortized over their respective estimated useful lives to their estimated residual values. The Company uses the straight-line method for depreciation and amortization of long-lived assets, except for certain intangible assets where the Company can reliably determine the pattern in which the economic benefits of the assets will be consumed.
At least quarterly, the Company evaluates whether any impairment triggering events, including the following, have occurred which would require such asset groups to be tested for impairment:
•
A significant decrease in the market price of a long-lived asset group;
•
a significant adverse change in the extent or manner in which a long-lived asset group is being used or in its physical condition;
•
a significant adverse change in legal factors or in business climate that could affect the value of a long-lived asset group, including an adverse action or assessment by a regulator;
•
an accumulation of costs significantly in excess of the amount originally expected for the acquisition or construction of a long-lived asset group;
•
a current-period operating or cash flow loss combined with a history of operating or cash flow losses or a projection or forecast that demonstrates continuing losses associated with the use of a long-lived asset group; or
•
a current expectation that, more likely than not, a long-lived asset group will be sold or otherwise disposed of significantly before the end of its previously estimated useful life.
When an impairment triggering event has occurred, the Company tests for recoverability of the asset group's carrying value using estimates of undiscounted future cash flows based on the existing service potential of the applicable asset group. In determining the service potential of a long-lived asset group, the Company considers its remaining useful life, cash-flow generating capacity, and physical output capacity. These estimates include the undiscounted cash flows associated with future expenditures necessary to maintain the existing service potential. Long-lived assets are grouped with other assets and liabilities at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities. The Company assesses potential impairment of its retail group long-lived assets by comparing trailing twelve month (TTM) store cash flows to the current carrying value of the store's long-lived assets. Stores that have been opened for more than one year, or have otherwise been identified by management as having one or more indicators of impairment, with TTM cash flows less than the current carrying amount of the store's long-lived assets are then reviewed to determine if an impairment exists. An impairment loss, if any, would only reduce the carrying amount of long-lived assets in the group based on the fair value of the group assets.
Goodwill and Other Intangible Assets
Intangible assets consist primarily of goodwill, trademarks, customer and distributor relationships, patents, lease rights, and non-compete agreements arising from the application of purchase accounting. Intangible assets with estimable useful lives are amortized and reviewed for impairment. Goodwill and intangible assets with indefinite useful lives are not amortized, but are tested for impairment at least annually, as of December 31, except for the Teva trademarks and Sanuk goodwill, which are tested as of October 31.
The assessment of goodwill impairment involves valuing the Company's reporting units that carry goodwill. Currently, the Company's reporting units are the same as the Company's operating segments. The Company first assesses qualitative factors to determine whether it is necessary to perform the two-step quantitative goodwill impairment test. The Company does not calculate the fair value of the reporting unit unless the Company determines, based on a qualitative assessment, that it is more likely than not that its fair value is less than its carrying amount. If the Company determines this, then the first quantitative step is a comparison of the fair value of the reporting unit with its carrying amount. If the fair value exceeds the carrying amount, goodwill is not impaired. If the fair value of the reporting unit is below the carrying amount, then a second step is performed to measure the amount of the impairment, if any. The test for impairment involves the use of estimates related to the fair values of the business operations with which goodwill is associated and the fair values of the intangible assets with indefinite lives.
The Company also evaluates the fair values of other intangible assets with indefinite useful lives in relation to their carrying values. The Company first assesses qualitative factors to determine whether it is necessary to perform a quantitative assessment of the indefinite life intangible asset. The Company does not calculate the fair value of the indefinite life intangible unless the Company determines, based on a qualitative assessment, that it is more likely than not that its fair value is less than its carrying amount. If the Company concludes that it is more likely than not that its fair value is less than its carrying amount, then the Company compares the fair value of the indefinite life intangible to its carrying amount, and if the fair value of the indefinite life intangible exceeds its carrying amount, no impairment charge will be recognized. If the fair value of the indefinite life intangible is less than the carrying amount, the Company will record an impairment charge to write-down the intangible asset to its fair value.
Determining fair value of goodwill and other intangible assets is highly subjective and requires the use of estimates and assumptions. The Company uses estimates including future revenues, royalty rates, discount rates, attrition rates, and market multiples, among others. The Company also considers the following factors:
•
the assets' ability to continue to generate income from operations and positive cash flow in future periods;
•
changes in consumer demand or acceptance of the related brand names, products, or features associated with the assets; and
•
other considerations that could affect fair value or otherwise indicate potential impairment.
In addition, facts and circumstances could change, including further deterioration of general economic conditions or the retail environment, customers reducing orders in response to such conditions, and increased competition. These or other factors could result in changes to the calculation of fair value which could result in impairment of the Company's remaining goodwill and other intangible assets. Changes in any one or more of these estimates and assumptions could produce different financial results.
Property and Equipment, Depreciation and Amortization
Property and equipment has a useful life expectancy of at least one year. Property and equipment includes tangible, non-consumable items owned by the Company valued at or above $3, certain computer software costs and internal or external computer system consulting work valued at or above $3 as defined below, and portable electronic devices valued at or above $1.5. Tangible, non-consumable items below these amounts are expensed. The value includes the purchase price, as well as costs to acquire (shipping and handling), sales tax, install (excluding site preparation costs), secure, and prepare the item for its intended use.
Depreciation of property and equipment is calculated using the straight-line method based on estimated useful lives. Machinery and equipment has estimated useful lives ranging from two to ten years, and furniture and fixtures has estimated useful lives ranging from three to seven years.  Capitalized website costs, which are included in the machinery & equipment category, are immaterial to the Company's consolidated financial statements. Leasehold improvements are amortized to their residual value on the straight-line basis over their estimated economic useful lives or the lease term, whichever is shorter. Leasehold improvement lives range from one to fifteen years. Buildings are depreciated over 39 years. The Company allocates depreciation and amortization of property, plant, and equipment to cost of sales and selling, general and administrative (SG&A) expenses. The majority of the Company's depreciation and amortization is included in SG&A expenses due to the nature of its operations. Most of the Company's depreciation and amortization is from its warehouses, its corporate headquarters and its retail stores. The Company outsources all manufacturing; therefore, the amount allocated to cost of sales is not material.
Fair Value Measurements
The fair values of the Company's cash and cash equivalents, trade accounts receivable, prepaid expenses, income tax receivable and other current assets, short-term borrowings, trade accounts payable, accrued payroll, other accrued expenses, income taxes payable and the value added tax payable approximate the carrying values due to the relatively short maturities of these instruments. The fair values of the Company's long-term liabilities, other than contingent consideration, recalculated using current interest rates, would not significantly differ from the carrying values. The fair value of the contingent consideration related to acquisitions and of the Company's derivatives are measured and recorded at fair value on a recurring basis. Changes in fair value resulting from either accretion or changes in discount rates or in the expectations of achieving the performance targets are recorded in SG&A expenses. The Company records the fair value of assets or liabilities associated with derivative instruments and hedging activities in other current assets or other accrued expenses, respectively, in the consolidated balance sheets.
The inputs used in measuring fair value are prioritized into the following hierarchy:
•
Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities.
•
Level 2: Inputs other than quoted prices included within Level 1 that are either directly or indirectly observable.
•
Level 3: Unobservable inputs in which little or no market activity exists, therefore requiring an entity to develop its own assumptions about the assumptions that market participants would use in pricing an asset or liability.
The tables below summarize the Company's financial liabilities and assets that are measured on a recurring basis at fair value:
 
Fair Value at March 31, 2015
 
Fair Value Measurement Using
 
Level 1
 
Level 2
 
Level 3
Assets (Liabilities) at fair value
 
 
 
 
 
 
 
Nonqualified deferred compensation asset
$
5,581

 
$
5,581

 
$
—

 
$
—

Nonqualified deferred compensation liability
$
(5,581
)
 
$
(5,581
)
 
$
—

 
$
—

Designated derivatives liability
$
(487
)
 
$
—

 
$
(487
)
 
$
—

Contingent consideration for acquisition of business
$
(26,000
)
 
$
—

 
$
—

 
$
(26,000
)
 
Fair Value at March 31, 2014
 
Fair Value Measurement Using
 
Level 1
 
Level 2
 
Level 3
Assets (Liabilities) at fair value
 
 
 
 
 
 
 
Nonqualified deferred compensation asset
$
4,534

 
$
4,534

 
$
—

 
$
—

Nonqualified deferred compensation liability
$
(4,534
)
 
$
(4,534
)
 
$
—

 
$
—

Designated derivatives liability
$
(832
)
 
$
—

 
$
(832
)
 
$
—

Contingent consideration for acquisition of business
$
(30,000
)
 
$
—

 
$
—

 
$
(30,000
)

 
Fair Value at December 31, 2013
 
Fair Value Measurement Using
 
Level 1
 
Level 2
 
Level 3
Assets (Liabilities) at fair value
 
 
 
 
 
 
 
Nonqualified deferred compensation asset
$
4,410

 
$
4,410

 
$
—

 
$
—

Nonqualified deferred compensation liability
$
(4,410
)
 
$
(4,410
)
 
$
—

 
$
—

Designated derivatives liability
$
(550
)
 
$
—

 
$
(550
)
 
$
—

Contingent consideration for acquisition of business
$
(48,000
)
 
$
—

 
$
—

 
$
(48,000
)

The Level 2 inputs consist of forward spot rates at the end of the reporting period (see Note 8).
The fair value of the contingent consideration is based on subjective assumptions. It is reasonably possible the estimated fair value of the contingent consideration could change in the near-term and the effect of the change could be material. The estimated fair value of the contingent consideration attributable to our Sanuk® (Sanuk) brand acquisition is based on the Sanuk brand's estimated future gross profits, using a probability weighted average sales forecast to determine a best estimate of gross profits. Estimated contingent consideration payments of approximately $24,200 are included within other accrued expenses in the consolidated balance sheet as of March 31, 2015. The estimated sales forecasts include a compound annual growth rate (CAGR) of 14.6% from calendar year 2014 through calendar year 2015, the final year of the contingent consideration arrangement. The gross profit forecast for calendar year 2015 is approximately $64,000, which is then used to apply the contingent consideration percentages in accordance with the applicable agreement (see Note 6). The total estimated contingent consideration is then discounted to the present value with a discount rate of 7.0%. The Company's use of different estimates and assumptions could produce different estimates of the value of the contingent consideration. For example, a 5.0% change in the estimated CAGR would change the total liability balance at March 31, 2015 by approximately $2,000.
In connection with the Company's acquisition of the Hoka brand, the purchase price includes contingent consideration with maximum payments of $2,000 which is based on the Hoka brand's net sales for calendar years 2013 through 2017. As of March 31, 2015, approximately $500 has been paid. The Company estimates future net sales using a probability weighted average sales forecast to determine a best estimate. Estimated future contingent consideration payments of approximately $1,500 are included within other accrued expenses and other long-term liabilities in the consolidated balance sheet as of March 31, 2015. The Company's use of different estimates and assumptions is not expected to have a material impact to the value of the contingent consideration.
Refer to Note 6 for further information on the contingent consideration arrangements.
The following table presents a reconciliation of the Level 3 measurement (rounded):
Beginning balance, January 1, 2013
$
71,500

Payments
(25,400
)
Change in fair value
1,900

Balance, December 31, 2013
$
48,000

Payments
(19,000
)
Change in fair value
1,000

Balance, March 31, 2014
$
30,000

Payments
(500
)
Change in fair value
(3,500
)
Balance, March 31, 2015
$
26,000


Stock Compensation
All of the Company's stock compensation issuances are classified within stockholders' equity. Stock compensation cost is measured at the grant date based on the value of the award and is expensed ratably over the vesting period. The Company recognizes expense only for those awards that management deems probable of achieving the performance and service objectives. Determining the expense of share-based awards requires judgment, including estimating the percentage of awards that will be forfeited and probabilities of meeting the awards' performance criteria. If actual forfeitures differ significantly from the estimates or if probabilities change during a period, stock compensation expense and the Company's results of operations could be materially impacted.
Nonqualified Deferred Compensation
In 2010, the Company established a nonqualified deferred compensation program that permits a select group of management employees to defer earnings to a future date on a nonqualified basis. For each plan year, on behalf of the Company, the Company's Board of Directors (the Board) may, but is not required to, contribute any amount it desires to any participant under this program. The Company's contribution will be determined by the Board annually. As of March 31, 2015, no such contribution has been approved by the Board . The value of the deferred compensation is recognized based on the fair value of the participants' accounts. The Company has established a rabbi trust for the purpose of supporting the benefits payable under this program. Deferred compensation of $540 is included in other accrued expenses and $5,041 is included in other long-term liabilities in the consolidated balance sheets at March 31, 2015. Deferred compensation of $4,534 and $4,410 are included in other long-term liabilities in the consolidated balance sheets as of March 31, 2014 and December 31, 2013, respectively.
Use of Estimates
The preparation of the Company's consolidated financial statements in accordance with United States generally accepted accounting principles (US GAAP) requires management to make estimates and assumptions that affect the amounts reported in these consolidated financial statements and accompanying notes. Management bases these estimates and assumptions upon historical experience, existing and known circumstances, authoritative accounting pronouncements and other factors that management believes to be reasonable. Significant areas requiring the use of management estimates relate to inventory write-downs, accounts receivable allowances, returns liabilities, stock compensation, performance based compensation, impairment assessments, depreciation and amortization, income tax liabilities and uncertain tax positions, fair value of financial instruments, and fair values of acquired intangibles, assets and liabilities, including estimated contingent consideration payments. Actual results could differ materially from these estimates.
Research and Development Costs
All research and development costs are expensed as incurred. Such costs amounted to $20,872, $4,486, $19,257 and $15,617 for the year ended March 31, 2015, quarter ended March 31, 2014 and the years ended December 31, 2013 and 2012, respectively, and are included in SG&A expenses in the consolidated statements of comprehensive income (loss).
Advertising, Marketing, and Promotion Costs
Advertising production costs are expensed the first time the advertisement is run. All other costs of advertising, marketing, and promotion are expensed as incurred. These expenses charged to operations for the year ended March 31, 2015, quarter ended March 31, 2014 and the years ended December 31, 2013 and 2012 were $111,162, $21,158, $86,510 and $78,528, respectively. Included in prepaid and other current assets at March 31, 2015, March 31, 2014, and December 31, 2013 were $1,899, $209 and $212, respectively, related to prepaid advertising, marketing, and promotion expenses for programs to take place after such dates.
Rent Expense
Rent expense is recorded using the straight-line method to account for scheduled rental increases or rent holidays. Lease incentives for tenant improvement allowances are recorded as reductions of rent expense over the lease term. The rental payments under some of our retail store leases are based on a minimum rental plus a percentage of the store's sales in excess of stipulated amounts. Rent expenses are included SG&A expenses in the consolidated statements of comprehensive income (loss).
Income Taxes
Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred taxes of a change in tax rates is recognized in income in the period that includes the enactment date.
The Company recognizes the effect of income tax positions only if those positions are more likely than not of being sustained. Recognized income tax positions are measured at the largest amount that is greater than 50% likely of being realized. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs. The Company accounts for interest and penalties generated by income tax contingencies as interest expense and SG&A expenses, respectively in the consolidated statements of comprehensive income (loss).
Net Income (Loss) per Share Attributable to Deckers Outdoor Corporation Common Stockholders
Basic net income (loss) per share represents net income (loss) attributable to Deckers Outdoor Corporation divided by the weighted-average number of common shares outstanding for the period. Diluted net income (loss) per share represents net income (loss) attributable to Deckers Outdoor Corporation divided by the weighted-average number of shares outstanding, including the dilutive impact of potential issuances of common stock. For the years ended March 31, 2015, December 31, 2013 and December 31, 2012 and quarter ended March 31, 2014, the difference between the weighted-average number of basic and diluted common shares resulted from the dilutive impact of nonvested stock units (NSUs), restricted stock units (RSUs), restricted stock awards (RSAs), stock appreciation rights (SARs), and options to purchase common stock. The reconciliations of basic to diluted weighted-average common shares outstanding were as follows:
 
Year ended
 
Quarter ended (transition period)
 
Years ended
 
3/31/2015
 
3/31/2014
 
12/31/2013
 
12/31/2012
Weighted-average shares used in basic computation
34,433,000

 
34,621,000

 
34,473,000

 
36,879,000

Dilutive effect of stock-based awards*
300,000

 
—

 
356,000

 
455,000

Weighted-average shares used for diluted computation
34,733,000

 
34,621,000

 
34,829,000

 
37,334,000

 
 
 
 
 
 
 
 


*Excluded NSUs
—

 
331,000

 
—

 
200,000

*Excluded RSUs
624,000

 
729,000

 
795,000

 
671,000

*Excluded outside director RSAs
—

 
6,000

 
—

 
—

*Excluded SARs
525,000

 
730,000

 
525,000

 
525,000


For the years ended March 31, 2015 and December 31, 2013 and 2012, the share-based awards that were excluded from the dilutive effect were excluded because the necessary conditions had not been satisfied for the shares to be issuable based on the Company's performance. For the quarter ended March 31, 2014, the Company excluded all NSUs, RSUs, RSAs and SARs from the diluted net loss per share computation because they were antidilutive due to the net loss during the period. As of March 31, 2015, the excluded RSUs include the maximum amount of the 2012, 2013 and 2015 Long-Term Incentive Plan (LTIP) Awards. As of March 31, 2014 and December 31, 2013 the excluded RSUs included the maximum amount of the Level III, 2012 and 2013 LTIP Awards. As of December 31, 2012, the excluded RSUs included the maximum amount of the Level III and 2012 LTIP Awards (see Note 7).
Foreign Currency Translation
The Company considers the US dollar as its functional currency. The Company has certain wholly-owned foreign subsidiaries with functional currencies other than the US dollar. In most cases, the Company's foreign subsidiaries' local currency is the same as the designated functional currency. The Company holds a portion of its cash and other monetary assets and liabilities in currencies other than its subsidiary's functional currency, and is exposed to financial statement transaction gains and losses as a result of remeasuring the operating results and financial positions into their functional currency. The Company remeasures these monetary assets and liabilities using the exchange rate as of the end of the reporting period, which results in gains and losses that are included in SG&A expenses in the results of operations as incurred, except for gains and losses arising on intercompany foreign currency transactions that are of a long-term investment nature. In addition, the Company translates assets and liabilities of subsidiaries with reporting currencies other than US dollars into US dollars using the exchange rates at of the end of the reporting period, which results in financial statement translation gains and losses in other comprehensive income (loss)(OCI).
Derivative Instruments and Hedging Activities
The Company transacts business in various foreign currencies and has international sales and expenses denominated in foreign currencies, subjecting the Company to foreign currency risk. The Company may enter into foreign currency forward or option contracts, generally with maturities of 15 months or less, to reduce the volatility of cash flows primarily related to forecasted revenue denominated in certain foreign currencies. In addition, the Company utilizes foreign exchange forward and option contracts to mitigate foreign currency exchange rate risk associated with foreign currency-denominated assets and liabilities, primarily intercompany balances. The Company does not use foreign currency contracts for trading purposes.
Certain of the Company's foreign currency forward contracts are designated cash flow hedges of forecasted intercompany sales and are subject to foreign currency exposures. These contracts allow the Company to sell Euros, British Pounds and Yen in exchange for US dollars at specified contract rates. Forward contracts are used to hedge forecasted intercompany sales over specific quarters. Changes in the fair value of these forward contracts designated as cash flow hedges are recorded as a component of accumulated other comprehensive income (loss) within stockholders' equity, and are recognized in the consolidated statements of comprehensive income (loss) during the period which approximates the time the corresponding third-party sales occur. The Company may also enter into foreign exchange contracts that are not designated as hedging instruments for financial accounting purposes. These contracts are generally entered into to offset the gains and losses on certain intercompany balances until the expected time of repayment. Accordingly, any gains or losses resulting from changes in the fair value of the non-designated contracts are reported in SG&A expenses in the consolidated statements of comprehensive income (loss). The gains and losses on these contracts generally offset the gains and losses associated with the underlying foreign currency-denominated balances, which are also reported in SG&A expenses. See Note 8 for the impact of derivative instruments and hedging activities on the Company's consolidated financial statements.
The Company records the assets or liabilities associated with derivative instruments and hedging activities at fair value based on Level 2 inputs in other current assets or other current liabilities, respectively, in the consolidated balance sheets. The Level 2 inputs consist of forward spot rates at the end of the reporting period. The accounting for gains and losses resulting from changes in fair value depends on the use of the derivative and whether it is designated and qualifies for hedge accounting.
For all hedging relationships, the Company formally documents the hedging relationship and its risk management objective and strategy for undertaking the hedge, the hedging instrument, the hedged transaction, the nature of the risk being hedged, how the hedging instrument's effectiveness in offsetting the hedged risk will be assessed prospectively and retrospectively, and a description of the method used to measure ineffectiveness. The Company factors the nonperformance risk of the Company and the counterparty into the fair value measurements of its derivatives. The Company also formally assesses, both at the inception of the hedging relationship and on an ongoing basis, whether the derivatives that are used in hedging relationships are highly effective in offsetting changes in cash flows of hedged transactions. The Company assesses hedge effectiveness and measures hedge ineffectiveness at least quarterly. For derivative instruments that are designated and qualify as part of a cash flow hedging relationship, the effective portion of the gain or loss on the derivative is reported in OCI and reclassified into earnings in the same period or periods during which the hedged transaction affects earnings. Gains and losses on the derivative representing either hedge ineffectiveness or hedge components excluded from the assessment of effectiveness are recognized in current earnings.
The Company discontinues hedge accounting prospectively when it determines that the derivative is no longer effective in offsetting cash flows attributable to the hedged risk, the derivative expires or is sold, terminated, or exercised, the cash flow hedge is designated because a forecasted transaction is not probable of occurring, or management determines to remove the designation of the cash flow hedge. In all situations in which hedge accounting is discontinued and the derivative remains outstanding, the Company continues to carry the derivative at its fair value on the balance sheet and recognizes any subsequent changes in its fair value in earnings. When it is probable that a forecasted transaction will not occur, the Company discontinues hedge accounting and recognizes immediately in earnings gains and losses that were accumulated in OCI related to the hedging relationship.
Comprehensive Income (Loss)
Comprehensive income (loss) is the total of net earnings and all other non-owner changes in equity. Except for net income (loss), foreign currency translation adjustments, and unrealized gains and losses on cash flow hedges, the Company does not have any transactions and other economic events that qualify as comprehensive income (loss).
Business Segment Reporting
Management of the Company has determined its reportable segments are its strategic business units and it is by these segments that information is reported to the Chief Operating Decision Maker (CODM). The six reportable segments are the UGG, Teva, Sanuk and other brands wholesale divisions, the E-Commerce business, and the retail store business. The CODM is the Principal Executive Officer. The Company performs an annual analysis of the appropriateness of its reportable segments. Information related to the Company's business segments is summarized in Note 11.
Cash Equivalents
The Company considers all highly liquid investments with original maturities of three months or less to be cash equivalents. Cash and cash equivalents include $127,900, $143,816 and $154,105 of money market funds at March 31, 2015, March 31, 2014 and December 31, 2013, respectively.
Retirement Plan
The Company provides a 401(k) defined contribution plan that eligible US employees may elect to participate in through tax-deferred contributions. The Company matches 50% of each eligible participant's tax-deferred contributions on up to 6% of eligible compensation on a per payroll period basis, with a true-up contribution if such eligible participant is employed by the Company on the last day of the calendar year. Internationally, the Company has various defined contribution plans. Certain international locations require mandatory contributions under social programs, and the Company contributes at least the statutory minimums. US 401(k) matching contributions totaled $1,726, $601, $1,386 and $1,066 during the year ended March 31, 2015, quarter ended March 31, 2014, and the years ended December 31, 2013 and 2012, respectively. In addition, the Company may also make discretionary profit sharing contributions to the plan. However, the Company did not make any profit sharing contributions for the year ended March 31, 2015, quarter ended March 31, 2014, and the years ended December 31, 2013 and 2012.
Recent Accounting Pronouncements
On May 28, 2014, FASB issued Accounting Standards Update (ASU) No. 2014-09, Revenue from Contracts with Customers, which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The ASU will replace most existing revenue recognition guidance in US GAAP when it becomes effective. The new standard is effective for the Company on April 1, 2017. Early application is not permitted. The standard permits the use of either the retrospective or cumulative effect transition method. The Company is evaluating the effect that ASU 2014-09 will have on its consolidated financial statements and related disclosures. The Company has not yet selected a transition method nor has it determined the effect of the standard on its ongoing financial reporting. Subsequent to March 31, 2015, the FASB proposed a one year deferral of the effective date of ASU No. 2014-09.

Subsequent to March 31, 2015, FASB issued ASU No. 2015-03, Simplifying the Presentation of Debt Issuance Costs, which requires an entity to present debt issuance costs on the balance sheet as a direct deduction from the carrying value of the associated debt liability, consistent with the presentation of a debt discount. Prior to the issuance of the standard, debt issuance costs were required to be presented in the balance sheet as a deferred charge (i.e., an asset). This ASU is effective for the Company on April 1, 2016, with early adoption permitted. The adoption of this ASU will only change the presentation of prepaid expenses, other assets and short-term borrowings in the Company’s consolidated balance sheet. The Company is considering early adoption of this update during its fiscal year 2016.
Property and Equipment
Property and Equipment
Property and Equipment
Property and equipment is summarized as follows:
 
 
 
 
 
 
 
3/31/2015
 
3/31/2014
 
12/31/2013
Land
$
25,543

 
$
25,531

 
$
19,954

Buildings
38,841

 
36,387

 
—

Machinery and equipment
158,136

 
98,035

 
84,941

Furniture and fixtures
36,751

 
31,085

 
25,961

Leasehold improvements
102,048

 
96,622

 
142,683

 
361,319

 
287,660

 
273,539

Less accumulated depreciation and amortization
129,002

 
103,090

 
99,473

Net property and equipment
$
232,317

 
$
184,570

 
$
174,066

Goodwill and Other Intangible Assets
Goodwill and Other Intangible Assets
Goodwill and Other Intangible Assets
Most of the Company's goodwill is related to the Sanuk reportable segment, with the remaining related to the UGG and other brands reportable segments. The Company's goodwill and other intangible assets are summarized as follows:
 
3/31/2015
 
3/31/2014
 
12/31/2013
Intangibles subject to amortization
 
 
 
 
 
Weighted-Average Amortization Period
13 years

 
14 years

 
14 years

Gross Carrying Amount
$
109,604

 
$
101,982

 
$
101,963

Accumulated Amortization
37,316

 
26,026

 
24,140

Net Carrying Amount
72,288

 
75,956

 
77,823

Intangibles not subject to amortization
 
 
 
 
 
Goodwill
127,934

 
127,934

 
128,725

Trademarks
15,455

 
15,455

 
15,455

Total goodwill and other intangible assets
$
215,677

 
$
219,345

 
$
222,003


Changes in the Company's goodwill are summarized as follows:
 
Goodwill,
Gross
 
Accumulated
Impairment
 
Goodwill, Net
Balance at January 1, 2013
$
144,556

 
$
(15,831
)
 
$
128,725

Changes related to additions, impairments and other adjustments
—

 
—

 
—

Balance at December 31, 2013
144,556

 
(15,831
)
 
128,725

Adjustments related to prior acquisitions
(791
)
 
—

 
(791
)
Balance at March 31, 2014
143,765

 
(15,831
)
 
127,934

Changes related to additions, impairments and other adjustments
—

 
—

 
—

Balance at March 31, 2015
$
143,765

 
$
(15,831
)
 
$
127,934


As of December 31, 2014 and 2013, the Company performed its annual impairment tests and evaluated its UGG and other brands' goodwill. As of October 31, 2014 and 2013, the Company performed its annual impairment tests and evaluated its Teva trademarks and Sanuk goodwill. Based on the carrying amounts of the UGG, Teva, Sanuk, and other brands' goodwill, trademarks, and net assets, the brands' fiscal year 2015, quarter ended March 31, 2014 and fiscal year 2013 sales and operating results, and the brands' long-term forecasts of sales and operating results as of their evaluation dates, the Company concluded that the carrying amounts of the UGG, Sanuk and other brands' goodwill, as well as the Teva trademarks, were not impaired. The Sanuk brand goodwill was evaluated based on Level 3 inputs as of October 31, 2013 and based on qualitative analyses as of October 31, 2014. As of December 31, 2014 and 2013, and as of October 31, 2014 and 2013, all goodwill other than the Sanuk brand goodwill and all other nonamortizable intangibles were evaluated based on qualitative analyses.
The Company's goodwill by segment is as follows:
 
3/31/2015
 
3/31/2014
 
12/31/2013
UGG brand
$
6,101

 
$
6,101

 
$
6,101

Sanuk brand
113,944

 
113,944

 
113,944

Other brands
7,889

 
7,889

 
8,680

Total
$
127,934

 
$
127,934

 
$
128,725


Aggregate amortization expense for amortizable intangible assets for the year ended March 31, 2015, quarter ended March 31, 2014 and years ended December 31, 2013 and 2012, was $11,291, $1,886, $7,975 and $9,312, respectively. The following table summarizes the expected amortization expense on existing intangible assets, excluding indefinite-lived intangible assets of $8,044 and trademarks of $15,455, for the next five years:
Year ending March 31,
 
2016
$
9,358

2017
8,361

2018
6,278

2019
5,621

2020
3,813

Thereafter
30,813

 
$
64,244

Income Taxes
Income Taxes
Income Taxes
Components of income tax expense (benefit) are as follows:
 
Year ended
 
Quarter ended (transition period)
 
Years ended
 
3/31/2015
 
3/31/2014
 
12/31/2013
 
12/31/2012
Current:
 
 
 
 
 
 
 
Federal
$
35,459

 
$
(572
)
 
$
51,058

 
$
50,911

State
6,861

 
(4
)
 
6,252

 
6,482

Foreign
7,069

 
5,255

 
6,650

 
3,368

Total
49,389

 
4,679

 
63,960

 
60,761

Deferred:
 
 
 
 
 
 
 
Federal
8,234

 
1,669

 
(2,580
)
 
(6,083
)
State
624

 
(1
)
 
(209
)
 
414

Foreign
1,112

 
(4,404
)
 
(1,303
)
 
12

Total
9,970

 
(2,736
)
 
(4,092
)
 
(5,657
)
Income tax expense
$
59,359

 
$
1,943

 
$
59,868

 
$
55,104


Foreign income before income taxes was $95,850 during the year ended March 31, 2015. Foreign loss before income taxes was $3,631 during the quarter ended March 31, 2014. Foreign income before income taxes was $60,851 and $51,409 during the years ended December 31, 2013 and 2012, respectively.
Actual income taxes differed from that obtained by applying the statutory federal income tax rate to income before income taxes as follows:
 
Year ended
 
Quarter ended (transition period)
 
Years ended
 
3/31/2015
 
3/31/2014
 
12/31/2013
 
12/31/2012
Computed expected income taxes
$
77,399

 
$
(260
)
 
$
71,945

 
$
64,282

State income taxes, net of federal income tax benefit
3,564

 
90

 
4,435

 
3,562

Foreign rate differential
(25,535
)
 
1,904

 
(16,399
)
 
(12,908
)
Unrecognized tax benefits
3,566

 
—

 
—

 
—

Other
365

 
209

 
(113
)
 
168

 
$
59,359

 
$
1,943

 
$
59,868

 
$
55,104


The tax effects of temporary differences that give rise to significant portions of deferred tax assets and deferred tax liabilities are presented below:
 
3/31/2015
 
3/31/2014
 
12/31/2013
Deferred tax assets (liabilities), current:
 
 
 
 
 
Uniform capitalization adjustment to inventory
$
4,040

 
$
4,114

 
$
5,492

Bad debt and other reserves
8,984

 
9,901

 
10,655

State taxes
482

 
(1,739
)
 
508

Prepaid expenses
(3,546
)
 
(2,217
)
 
(2,193
)
Accrued bonus
4,120

 
2,093

 
5,071

Foreign currency hedge
434

 
305

 
348

Net operating loss carry forwards
—

 
9,414

 
—

Other
(448
)
 
—

 
—

Total deferred tax assets, current
14,066

 
21,871

 
19,881

Deferred tax assets (liabilities), noncurrent:
 
 
 
 
 
Amortization and impairment of intangible assets
1,004

 
5,267

 
4,603

Depreciation of property and equipment
(6,148
)
 
(4,833
)
 
(6,034
)
Share-based compensation
12,044

 
10,638

 
11,226

Foreign currency translation
720

 
382

 
667

Deferred rent
4,885

 
4,290

 
4,028

Acquisition costs
764

 
756

 
755

Other
1,327

 
128

 
—

Net operating loss carry forwards
421

 
434

 
506

Total deferred tax assets, noncurrent
15,017

 
17,062

 
15,751

Net deferred tax assets
$
29,083

 
$
38,933

 
$
35,632


In order to fully realize the deferred tax assets, the Company will need to generate future taxable income of approximately $76,000. The deferred tax assets are primarily related to the Company's domestic operations. The change in net deferred tax assets between March 31, 2015 and March 31, 2014 includes approximately $100 attributable to OCI. The change in net deferred tax assets between March 31, 2014 and December 31, 2013 includes approximately $800 attributable to goodwill, partially offset by approximately $200 attributable to OCI. Domestic taxable income for the year ended March 31, 2015, the quarter ended March 31, 2014 and the years ended December 31, 2013 and 2012 was $91,017, $0, $151,204 and $141,660, respectively. Based upon the level of historical taxable income and projections for future taxable income over the periods in which the deferred tax assets are deductible, management believes it is more likely than not that the results of future operations will generate sufficient taxable income to realize the net deferred tax assets and, accordingly, no valuation allowance was recorded in fiscal years 2015, 2013 and 2012.
As of March 31, 2015, withholding and US taxes have not been provided on approximately $362,000 of unremitted earnings of non-US subsidiaries because the earnings are expected to be reinvested outside of the US indefinitely. Repatriation of all foreign earnings would result in approximately $118,000 of US income tax. Such earnings would become taxable upon the sale or liquidation of these subsidiaries or upon the remittance of dividends. As of March 31, 2015, the Company had approximately $132,000 of cash and cash equivalents outside the US that would be subject to additional income taxes if they were to be repatriated. If the Company were to repatriate foreign cash, the Company would record the US tax liability net of any foreign income taxes previously paid on this cash. The Company has no plans to repatriate any of its foreign cash. For fiscal year 2015, the Company generated approximately 25.0% of its pre-tax earnings from a country which does not impose a corporate income tax.
When tax returns are filed, some positions taken are subject to uncertainty about the merits of the position taken or the amount that would be ultimately sustained. The benefit of a tax position is recognized in the financial statements in the period during which the Company believes it is more likely than not that the position will be sustained upon examination. Tax positions that meet the more likely than not recognition threshold are measured as the largest amount of tax benefit that is more than 50% likely of being realized upon settlement. The portion of the benefits that exceeds the amount measured as described above is reflected as a liability for unrecognized tax benefits in the accompanying consolidated balance sheets along with any associated interest and penalties that would be payable to the taxing authorities upon examination. 
A reconciliation of the beginning and ending amounts of total unrecognized tax benefits is as follows:
Balance at January 1, 2013
$
—

Gross change related to current and prior years' tax positions
—

Balance, December 31, 2013
$
—

Gross change related to current and prior years' tax positions
—

Balance, March 31, 2014
$
—

Gross increase related to current year tax positions
1,293

Gross increase related to prior year tax positions
3,374

Balance, March 31, 2015
$
4,667


The amount of unrecognized tax benefits that, if recognized, would affect the effective tax rate as of March 31, 2015 was $3,566. It is reasonably possible that approximately $300 of unrecognized tax benefits will be settled within the next 12 months. As of March 31, 2015, interest and potential penalties of $1,246 were accrued in the consolidated balance sheets resulting from tax positions that are subject to examination. As of March 31, 2014 and December 31, 2013, interest and potential penalties of $349 and $360, respectively, were accrued in the consolidated balance sheets resulting from outstanding state liabilities as a result of resolved Federal examinations.
The Company files income tax returns in the US federal jurisdiction and various state, local, and foreign jurisdictions. With few exceptions, the Company is no longer subject to US federal, state, local, or non-US income tax examinations by tax authorities for years before 2009.
Although the Company believes its tax estimates are reasonable and prepares its tax filings in accordance with all applicable tax laws, the final determination with respect to any tax audits, and any related litigation, could be materially different from the Company's estimates or from its historical income tax provisions and accruals. The results of an audit or litigation could have a material effect on operating results or cash flows in the periods for which that determination is made. In addition, future period earnings may be adversely impacted by litigation costs, settlements, penalties, or interest assessments.
The Company has on-going income tax examinations under various state and foreign tax jurisdictions. It is the opinion of management that these audits and inquiries will not have a material impact on the Company's consolidated financial statements.
Notes Payable and Long-Term Debt
Notes Payable and Long-Term Debt
Notes Payable and Long-Term Debt
In August 2011, the Company entered into a Credit Agreement (Credit Agreement) with JPMorgan Chase Bank, National Association (JPMorgan) as the administrative agent, Comerica Bank and HSBC Bank USA, National Association as syndication agents, and the lenders party thereto. In August 2012 and again in November 2014, the Company amended and restated in its entirety the Credit Agreement. The Second Amended and Restated Credit Agreement is a five-year, $400,000 secured revolving credit facility that contains a $75,000 sublimit for the issuance of letters of credit and a $5,000 sublimit for swingline loans and matures on November 13, 2019. Subject to customary conditions and the approval of any lender whose commitment would be increased, the Company has the option to increase the maximum principal amount available under the Second Amended and Restated Credit Agreement by up to an additional $200,000, resulting in maximum available principal amount of $600,000. None of the lenders under the Second Amended and Restated Credit Agreement has committed at this time or is obligated to provide any such increase in the commitments. In addition to allowing borrowings in US dollars, the Second Amended and Restated Credit Agreement provides a $150,000 sublimit for borrowings in Euros, British pounds and any other currency that is subsequently approved by JPMorgan, each lender and the issuing bank. At the Company's option, revolving loans issued under the Second Amended and Restated Credit Agreement will initially bear interest at either the adjusted London Interbank Offered Rate (LIBOR) for 30 days (0.18% at March 31, 2015) plus 1.25% per annum, in the case of LIBOR borrowings, or at the alternate base rate plus 0.25% per annum, and thereafter the interest rate will fluctuate between adjusted LIBOR plus 1.25% per annum and adjusted LIBOR plus 2.00% per annum (or between the alternate base rate plus 0.25% per annum and the alternate base rate plus 1.00% per annum), based upon the Company's total adjusted leverage ratio at such time. In addition, the Company will initially be required to pay fees of 0.175% per annum on the daily amount of the revolving credit facility, and thereafter the fee rate will fluctuate between 0.175% and 0.30% per annum, based upon the Company's total adjusted leverage ratio.
The Company's obligations under the Second Amended and Restated Credit Agreement are guaranteed by the Company's existing and future wholly-owned domestic subsidiaries (other than certain immaterial subsidiaries, foreign subsidiaries, foreign subsidiary holding companies and specified excluded subsidiaries) (the Guarantors), and is secured by a first-priority security interest in substantially all of the assets of the Company and the Guarantors, including all or a portion of the equity interests of certain of the Company's domestic and first-tier foreign subsidiaries.
The Second Amended and Restated Credit Agreement contains financial covenants which include: the total adjusted leverage ratio must not be greater than 3.25 to 1.00; the sum of the consolidated annual earnings before interest, taxes, depreciation, and amortization (EBITDA) and annual rental expense, divided by the sum of the annual interest expense and the annual rental expense must be greater than 2.25 to 1.00; and other customary limitations. The Second Amended and Restated Credit Agreement contains certain other covenants which include: the maximum amount paid for capital expenditures may not exceed $110,000 per year if the total adjusted leverage ratio is equal to or exceeds 2.75 to 1.00; the maximum additional unsecured debt may not exceed $200,000; the Company may not have aggregate ERISA events that are considered materially adverse; the Company may not have a change of control (as defined in the Second Amended and Restated Credit Agreement); and no restrictions on dividends, share repurchases or acquisitions if the total adjusted leverage ratio does not exceed 2.75 to 1.00.
At March 31, 2015, the Company had no outstanding borrowings under the Second Amended and Restated Credit Agreement and had outstanding letters of credit of approximately $100. As a result, the unused balance under the Second Amended and Restated Credit Agreement was approximately $399,900 at March 31, 2015. In August 2012 the Company incurred approximately $1,800 of deferred financing costs which are included in prepaid expenses and amortized over the term of the Amended and Restated Credit Agreement using the straight-line method. In November 2014, the Company incurred approximately $800 of additional deferred financing costs which were combined with the remaining unamortized balance from the Amended and Restated Credit Agreement included in prepaid expenses. The combined amount is being amortized over the term of the Second Amended and Restated Credit Agreement using the straight-line method.
In August 2013, Deckers (Beijing) Trading Co., LTD, a fully owned subsidiary, entered into a credit facility in China (China Credit Facility) that provides for an uncommitted revolving line of credit of up to CNY 60,000, or approximately $10,000, in the quarters ending September 30 and December 31 and CNY 20,000, or approximately $3,300, in the quarters ending March 31 and June 30.  The China Credit Facility is payable on demand and subject to annual review and renewal.  The obligations under the China Credit Agreement are guaranteed by the Company for 110% of the facility amount in USD. In December 2013, the China Credit Facility was revised to provide for the uncommitted revolving line of credit of up to CNY 60,000 to be extended to the entire year. In October 2014, the China Credit Facility was amended (Amended China Credit Facility) to include, among other things, an extension of the aggregate period of borrowing from 12 months to 18 months. At March 31, 2015, the Company had approximately $4,900 of outstanding borrowings under the Amended China Credit Facility.  Interest is based on the People’s Bank of China rate, which was 5.35% at March 31, 2015.
In July 2014, the Company obtained a mortgage secured by its corporate headquarters property for approximately $33,900.  At March 31, 2015 the outstanding balance under the mortgage was approximately $33,600, which includes approximately $500 in short-term borrowings and approximately $33,100 in mortgage payable in the consolidated balance sheet. The mortgage has a fixed interest rate of 4.928%.  Payments include interest and principal in an amount that amortizes the principal balance over a 30-year period, however the loan will mature and have a balloon payment due in 15 years of approximately $23,400.  Minimum principal payments over the next 5 years are approximately $2,700. In December 2014, the mortgage financial covenants were amended to be consistent with the financial covenants of the Second Amended and Restated Credit Agreement as discussed above.
Commitments and Contingencies
Commitments and Contingencies
Commitments and Contingencies
The Company leases office, distribution, retail facilities, and automobiles, under operating lease agreements, which expire through 2028. Some of the leases contain renewal options for approximately one to fifteen years. Future minimum commitments under the lease agreements are as follows:
Year ending March 31,
 
2016
$
53,664

2017
55,325

2018
49,357

2019
39,293

2020
32,809

Thereafter
118,451

 
$
348,899



The following schedule shows the composition of total rental expense.
 
Year ended
 
Quarter ended (transition period)
 
Years ended
 
3/31/2015
 
3/31/2014
 
12/31/2013
 
12/31/2012
Minimum rentals
$
61,363

 
$
14,260

 
$
47,871

 
$
37,270

Contingent rentals
14,707

 
3,099

 
12,318

 
9,366

 
$
76,070

 
$
17,359

 
$
60,189

 
$
46,636


Purchase Obligations.    The Company had $664,659 of outstanding purchase orders with its manufacturers as of March 31, 2015. In addition, the Company entered into agreements for the build out of new retail stores, promotional activities and other services. Future commitments under these purchase orders and other agreements for the year ending March 31, 2016 total $664,429. Included in the fiscal year 2016 amount are remaining commitments, net of deposits, that are also unconditional purchase obligations relating to sheepskin contracts. The Company enters into contracts requiring minimum purchase commitments of sheepskin that Deckers' affiliates, manufacturers, factories, and other agents (each or collectively, a Buyer) must make on or before a specified target date. Under certain contracts, the Company may pay an advance deposit that shall be repaid to the Company as Buyers purchase goods under the terms of these agreements. Included in other current assets on the consolidated balance sheets are approximately $14,000, $11,000 and $67,000 of advance deposits as of March 31, 2015, March 31, 2014 and December 31, 2013, respectively. In the event that a Buyer does not purchase certain minimum commitments on or before certain target dates, the supplier may retain a portion of the advance deposit until the amounts of the commitments are fulfilled. These agreements may result in unconditional purchase obligations if a Buyer does not meet the minimum purchase requirements. In the event that a Buyer does not purchase such minimum commitments by the target dates, the Company shall be responsible for compliance with any and all minimum purchase commitments under these contracts, and the Company would make additional deposit payments towards the purchase of the remaining minimum commitments and such additional deposits would be returned as the Buyers purchase the remaining minimum commitments. The contracts do not permit net settlement. Minimum commitments for these contracts as of March 31, 2015 were as follows:

Contract
Effective Date
 
Final
Target Date
 
Advance
Deposit
 
Total
Minimum
Commitment
 
Remaining
Deposit
 
Remaining
Commitment,
Net of Deposit
October 2011
 
September 2015
 
$50,000
 
$286,000
 
$13,783
 
—
October 2014
 
September 2015
 
—
 
$51,240
 
—
 
$32,487
September 2014
 
September 2015
 
—
 
$47,960
 
—
 
$15,434

        Indemnification.    The Company has agreed to indemnify certain of its licensees, distributors, and promotional partners in connection with claims related to the use of the Company's intellectual property. The terms of such agreements range up to 5 years initially and generally do not provide for a limitation on the maximum potential future payments. From time to time, the Company also agrees to indemnify its licensees, distributors and promotional partners in connection with claims that the Company’s products infringe the intellectual property rights of third parties.  These agreements may or may not be made pursuant to a written contract. In addition, from time to time, the Company also agrees to standard indemnification provisions in commercial agreements in the ordinary course of business.
Management believes the likelihood of any payments under any of these arrangements is remote and would be immaterial. This determination was made based on a prior history of insignificant claims and related payments. There are no currently pending claims relating to indemnification matters involving the Company's intellectual property.
Contingent Consideration.    In July 2011, the Company acquired the Sanuk brand, and the total purchase price included contingent consideration payments. As of March 31, 2015, the remaining contingent consideration payment, which has no maximum, is 40.0% of the Sanuk brand gross profit in calendar year 2015 and is to be paid within 60 days following the end of the performance period.
As of March 31, 2015, March 31, 2014 and December 31, 2013, the Company had total contingent consideration for the acquisition of the Sanuk brand of approximately $24,200, $28,000 and $46,200, respectively, of which approximately $24,200, $0 and $18,600 is included within other accrued expenses and approximately $0, $28,000 and $27,600 is included within other long-term liabilities at March 31, 2015, March 31, 2014 and December 31, 2013, respectively, in the consolidated balance sheets.
In September 2012, the Company acquired Hoka, and the total purchase price included contingent consideration payments with a maximum of $2,000 which is based on the Hoka brand's net sales for calendar years 2013 through 2017, of which approximately $500 has been paid. As of March 31, 2015, March 31, 2014 and December 31, 2013 contingent consideration for the acquisition of the Hoka brand of approximately $1,500, $1,800 and $1,800, respectively are included within other accrued expenses and other long-term liabilities in the consolidated balance sheets. Refer to Note 1 for further information on the contingent consideration amounts.
Future Capital Commitments. As of March 31, 2015, the Company had approximately $8,000 of material commitments for future capital expenditures primarily related to equipment costs of its new distribution center.
Stockholders' Equity
Stockholders' Equity
Stockholders' Equity
In May 2006, the Company adopted the 2006 Equity Incentive Plan (the 2006 Plan), which was amended May 9, 2007. The primary purpose of the 2006 Plan is to encourage ownership in the Company by key personnel, whose long-term service is considered essential to the Company's continued success. The 2006 Plan provides for 6,000,000 shares of the Company's common stock that are reserved for issuance to employees, directors, or consultants. The maximum aggregate number of shares that may be issued under the 2006 Plan through the exercise of incentive stock options is 4,500,000. Pursuant to the Deferred Stock Unit Compensation Plan, a Sub Plan under the 2006 Plan, a participant may elect to defer settlement of their outstanding unvested awards until such time as elected by the participant.
The Company has elected to grant NSUs annually to key personnel. The NSUs granted entitle the employee recipients to receive shares of common stock in the Company upon vesting of the NSUs. The vesting of most NSUs is subject to achievement of certain performance targets, with the remaining NSUs subject only to time restrictions. For the majority of NSUs granted in 2013 and after, if the performance goals are achieved, these awards vest in equal one-third installments at the end of each of the three years after the performance goals are achieved. For NSUs granted in 2012, the performance target was not met and, therefore, the awards did not vest.
The Company also has long-term incentive award agreements under the 2006 Plan for issuance of SARs and RSUs, which were awarded to certain executive officers of the Company. These awards vest subject to certain long-term performance objectives and certain long-term service conditions. One-half of the SAR and RSU awards vested 80% on December 31, 2010 and 20% on December 31, 2011, and, provided that the conditions are met, one-half of the SAR and RSU awards vest 80% on December 31, 2015 and 20% on December 31, 2016. The Company considers achievement of the remaining performance conditions as probable and is recognizing such compensation cost over the service period.
In June 2011, the Board of Directors of the Company adopted a long-term incentive award under its 2006 Equity Incentive Plan (Level III Awards). The shares under these awards were available for issuance to current and future members of the Company's management team, including the Company's named executive officers. These awards were to vest on December 31, 2014 subject to certain long-term performance objectives and certain long-term service conditions. Under this program, the Company granted a maximum amount of 275,000 RSUs during the year ended December 31, 2011. For all Level III Awards granted, the performance objectives were not met and, therefore, the awards did not vest.
In May 2012, the Board of Directors of the Company adopted a long-term incentive award under its 2006 Equity Incentive Plan (2012 LTIP Awards). The shares under these awards were available for issuance to current and future members of the Company's management team, including the Company's named executive officers. Each recipient received a specified maximum number of RSUs, each of which represents the right to receive one share of the Company's common stock. These awards vest subject to certain long-term performance objectives and certain long-term service conditions. The awards will vest on December 31, 2015 only if the Company meets certain revenue targets ranging between $2,200,000 and $2,900,000 and certain diluted earnings per share targets ranging between $7.00 and $10.50 for the year ended December 31, 2015. No vesting of any 2012 LTIP Awards will occur if either of the threshold performance criteria is not met for the year ending December 31, 2015. To the extent financial performance is achieved above the threshold levels, the number of RSUs that will vest will increase up to the maximum number of units granted under the award. Under this program, the Company granted awards that contain a maximum amount of 352,000 RSUs during the year ended December 31, 2012. The grant date fair value of these RSUs was $56.12 per share. As of March 31, 2015 and 2014 and December 31, 2013, the Company did not believe that the achievement of the performance objectives of these awards was probable, and therefore the Company did not recognize compensation expense for these awards. If the performance objectives become probable, the Company will then begin recording an expense for the 2012 LTIP Awards and would recognize a cumulative catch-up adjustment in the period they become probable. As of March 31, 2015, the cumulative amount would be approximately $12,000 based on the maximum number of units if the performance objectives were probable.
In December 2013, the Board of Directors of the Company adopted a long-term incentive award under its 2006 Equity Incentive Plan (2013 LTIP Awards). The shares under these awards were available for issuance to current and future members of the Company's management team, including the Company's named executive officers. Each recipient received a specified maximum number of RSUs, each of which represents the right to receive one share of the Company's common stock. These awards vest subject to certain long-term performance objectives and certain long-term service conditions. The recipients of these awards are divided into two participant groups, revenue generating and non-revenue generating. The awards for the non-revenue generating participants will vest on March 31, 2016 only if the Company meets certain revenue targets ranging between $2,290,000 and $2,558,000 and certain EBITDA targets ranging between $372,000 and $415,000 for the fiscal year ending March 31, 2016. The awards for the revenue generating participants will vest on March 31, 2016 only if the Company achieves EBITDA of $350,000 and the respective revenue by brand and channel managed by each participant meets certain revenue targets that are tailored to each brand and channel for the fiscal year ending March 31, 2016. No vesting of any 2013 LTIP Awards will occur if either of the threshold performance criteria is not met for the year ending March 31, 2016. To the extent financial performance is achieved above the threshold levels, the number of RSUs that will vest will increase up to the maximum number of units granted under the award. Under this program, the Company granted awards that contain a maximum amount of 156,000 RSUs during the year ended December 31, 2013. The grant date fair value of these RSUs was $84.52 per share. As of March 31, 2015, the Company did not believe that the achievement of the performance objectives of these awards was probable, and therefore the Company reversed compensation expense accrued in prior periods. The amount reversed was immaterial to the Company's consolidated financial statements. If the performance objectives become probable, the Company will then begin recording an expense for the 2013 LTIP Awards and would recognize a cumulative catch-up adjustment in the period they become probable. As of March 31, 2015, the cumulative amount would be approximately $2,000 based on the maximum number of units if the performance objectives were probable.
In September 2014, the Board of Directors of the Company approved a long-term incentive award (2015 LTIP Awards) under its 2006 Equity Incentive Plan. The shares under these awards were available for issuance to current and future members of the Company's leadership team, including the Company's named executive officers. Each recipient received a specified maximum number of RSUs, each of which represents the right to receive one share of the Company's common stock. These awards vest subject to certain long-term performance objectives and certain long-term service conditions. The awards will vest on March 31, 2017 only if the Company meets certain revenue targets ranging between approximately $2,155,000 and approximately $2,447,000 and certain EBITDA targets ranging between approximately $336,000 and approximately $394,000 for the fiscal year ending March 31, 2017. No vesting of any 2015 LTIP Awards will occur if either of the threshold performance criteria is not met for the year ending March 31, 2017. To the extent financial performance is achieved above the threshold levels, the number of RSUs that will vest will increase up to the maximum number of units granted under the award. Under this new program, the Company granted awards that contain a maximum amount of approximately 160,000 RSUs during the year ended March 31, 2015. The average grant date fair value of these RSUs was $98.29 per share. As of March 31, 2015, future unrecognized compensation cost for the 2015 LTIP Awards, excluding estimated forfeitures, was approximately $6,100. As of March 31, 2015, based on the Company's long-range forecast, the Company believed that the achievement of at least the threshold performance objectives of these awards was probable, and therefore the Company recognized compensation expense accordingly.
In June 2012, the Company approved a stock repurchase program to repurchase up to $200,000 of the Company's common stock in the open market or in privately negotiated transactions, subject to market conditions, applicable legal requirements, and other factors. The program did not obligate the Company to acquire any particular amount of common stock and the program may be suspended at any time at the Company's discretion. As of February 28, 2015, the Company had repurchased approximately 3,823,000 shares under this program, for approximately $200,000, or an average price of $52.31. As of February 28, 2015, the Company had repurchased the full amount authorized under this program.
In January 2015, the Company approved a new stock repurchase program to repurchase up to $200,000 of the Company's common stock in the open market or in privately negotiated transactions, subject to market conditions, applicable legal requirements, and other factors. The program does not obligate the Company to acquire any particular amount of common stock and the program may be suspended at any time at the Company's discretion. As of March 31, 2015, the Company had repurchased approximately 377,000 shares under this program, for approximately $27,900, or an average price of $74.09 leaving the remaining approved amount at $172,100.
On a quarterly basis, the Company grants fully-vested shares of its common stock to each of its outside directors. The fair value of such shares is expensed on the date of issuance.
The table below summarizes stock compensation amounts recognized in the consolidated statements of comprehensive income (loss):
 
Year ended
 
Quarter ended (transition period)
 
Years ended
 
3/31/2015
 
3/31/2014
 
12/31/2013
 
12/31/2012
Compensation expense recorded for:
 
 
 
 
 
 
 
NSUs
$
9,295

 
$
1,863

 
$
10,545

 
$
11,849

SARs
1,846

 
381

 
1,302

 
1,501

RSUs
1,323

 
354

 
287

 
231

Directors' shares
1,060

 
267

 
1,002

 
1,080

Total compensation expense
13,524

 
2,865

 
13,136

 
14,661

Income tax benefit recognized
(5,143
)
 
(1,082
)
 
(4,950
)
 
(5,573
)
Net compensation expense
$
8,381

 
$
1,783

 
$
8,186

 
$
9,088


The table below summarizes the total remaining unrecognized compensation cost related to nonvested awards that are considered probable of vesting as of March 31, 2015, and the weighted-average period over which the cost is expected to be recognized as of March 31, 2015:
 
Unrecognized
Compensation
Cost
 
Weighted-Average
Remaining
Vesting Period (Years)
NSUs
$
13,917

 
1.5
SARs
1,355

 
0.9
RSUs
6,317

 
1.5
Total
$
21,589

 
 

The unrecognized compensation cost excludes a maximum of $15,637 and $10,396 of compensation cost on the 2012 LTIP Awards and 2013 LTIP Awards, respectively, as achievement of the performance conditions are not considered probable.
Nonvested Stock Units Issued Under the 2006 Plan
 
Number of
Shares
 
Weighted-
Average
Grant-Date
Fair Value
Nonvested at January 1, 2012
677,000

 
$
48.14

Granted
209,000

 
63.18

Vested
(297,000
)
 
35.90

Forfeited
(18,000
)
 
63.68

Cancelled*
(200,000
)
 
62.17

Nonvested at December 31, 2012
371,000

 
$
58.51

Granted
304,000

 
57.30

Vested
(315,000
)
 
53.19

Forfeited
(20,000
)
 
61.08

Nonvested at December 31, 2013
340,000

 
$
62.23

Granted
—

 
—

Vested
(2,000
)
 
58.11

Forfeited
(7,000
)
 
64.15

Nonvested at March 31, 2014
331,000

 
$
62.21

Granted
196,000

 
82.34

Vested
(142,000
)
 
68.39

Forfeited
(30,000
)
 
64.18

Cancelled*
(15,000
)
 
84.04

Nonvested at March 31, 2015
340,000

 
$
70.11


*     Nonvested Stock Units cancelled during the period represent awards granted whose performance criteria were not met.

Stock Appreciation Rights Issued Under the 2006 Plan
 
Number of
SARs
 
Weighted-
Average
Exercise
Price
 
Weighted-
Average
Remaining
Contractual
Term
(Years)
 
Aggregate
Intrinsic
Value
Outstanding at January 1, 2012
760,000

 
$
26.73

 
8.8
 
$
37,118

Granted
—

 
—

 
 
 
 
Exercised
(15,000
)
 
26.73

 
 
 
 
Forfeited
—

 
—

 
 
 
 
Outstanding at December 31, 2012
745,000

 
$
26.73

 
7.9
 
$
10,087

Granted
—

 
—

 
 
 
 
Exercised
(15,000
)
 
26.73

 
 
 
 
Forfeited
—

 
—

 
 
 
 
Outstanding at December 31, 2013
730,000

 
$
26.73

 
6.9
 
$
42,143

Granted
—

 
—

 
 
 
 
Exercised
—

 
—

 
 
 
 
Forfeited
—

 
—

 
 
 
 
Outstanding at March 31, 2014
730,000

 
$
26.73

 
6.7
 
$
38,690

Granted
—

 
—

 
 
 
 
Exercised
(15,000
)
 
26.73
 
 
 
 
Forfeited
—

 
—

 
 
 
 
Outstanding at March 31, 2015
715,000

 
$
26.73

 
5.8
 
$
32,990

Exercisable at March 31, 2015
190,000

 
$
26.73

 
2.1
 
$
8,767

Expected to vest and exercisable at March 31, 2015
702,000

 
$
26.73

 
5.8
 
$
32,396


The maximum contractual term is 10 and 15 years from the date of grant for those SARs with final vesting dates of December 31, 2011 and December 31, 2016, respectively. The number of SARs expected to vest is based on the probability of achieving certain performance conditions and is also reduced by estimated forfeitures. The difference between the amount outstanding and the amount expected to vest and exercisable at March 31, 2015 was estimated forfeitures for estimated failure to meet the long-term service conditions.
Restricted Stock Units Issued Under the 2006 Plan
 
Number of
Shares
 
Weighted-
Average
Grant-Date
Fair Value
Nonvested at January 1, 2012
319,000

 
$
70.15

Granted
352,000

 
56.12

Vested
—

 
—

Forfeited
—

 
—

Nonvested at December 31, 2012
671,000

 
$
62.80

Granted
156,000

 
84.52

Vested
—

 
—

Forfeited
(32,000
)
 
63.69

Nonvested at December 31, 2013
795,000

 
$
67.03

Granted
—

 
—

Vested
—

 
—

Forfeited
(66,000
)
 
67.23

Nonvested at March 31, 2014
729,000

 
$
67.01

Granted
160,000

 
98.29

Vested
—

 
—

Forfeited
(35,000
)
 
78.39

Cancelled
(230,000
)
 
82.09
Nonvested at March 31, 2015
624,000

 
$
68.82


The amounts granted are the maximum amount under the respective awards.
Foreign Currency Exchange Contracts and Hedging
Foreign Currency Exchange Contracts and Hedging
Foreign Currency Exchange Contracts and Hedging
The Company had foreign currency forward contracts designated as cash-flow hedges with notional amounts totaling approximately $46,000, $64,000 and $77,000 as of March 31, 2015 and 2014, and December 31, 2013, respectively. These contracts were held by four counterparties and, as of March 31, 2015, were expected to mature over the next 12 months.
The nonperformance risk of the Company and the counterparties did not have a material impact on the fair value of the derivatives. During the year ended March 31, 2015, the ineffective portion relating to these hedges was immaterial and the hedges remained effective as of March 31, 2015. The effective portion of the gain or loss on the derivative is reported in other comprehensive income (loss) and reclassified into earnings in the same period or periods during which the hedged transaction affects earnings. As of March 31, 2015, the total amount in accumulated other comprehensive income (loss) (see Note 10) was expected to be reclassified into income within the next 15 months.
Subsequent to March 31, 2015, the Company entered into non-designated derivative contracts with notional amounts totaling approximately $42,000 and designated derivative contracts with notional amounts totaling approximately $31,000. All derivative contracts were held by six counterparties.
The following tables summarize the effect of derivative instruments on the consolidated financial statements:
 
Year ended
 
Quarter ended (transition period)
 
Year ended
 
3/31/2015
 
3/31/2014
 
12/31/2013
Derivatives in Designated Cash Flow Hedging Relationships
Foreign Exchange Contracts
 
Foreign Exchange Contracts
 
Foreign Exchange Contracts
Amount of Gain (Loss) Recognized in OCI on Derivative (Effective Portion)
$1,556
 
$(47)
 
$(779)
Location of Gain (Loss) Reclassified from Accumulated OCI into Income (Effective Portion)
Net Sales
 
Net Sales
 
Net Sales
Amount of Gain (Loss) Reclassified from Accumulated OCI into Income (Effective Portion)
$1,226
 
$(283)
 
$17
Location of Amount Excluded from Effectiveness Testing
SG&A expenses
 
SG&A expenses
 
SG&A expenses
Gain (Loss) from Amount Excluded from Effectiveness Testing
$(69)
 
$(31)
 
$(11)

 
Year ended
 
Quarter ended (transition period)
 
Year ended
 
3/31/2015
 
3/31/2014
 
12/31/2013
Derivatives Not Designated as Hedging Instruments
Foreign Exchange Contracts
 
Foreign Exchange Contracts
 
Foreign Exchange Contracts
Location of Gain (Loss) Recognized in Income on Derivatives
SG&A expenses
 
SG&A expenses
 
SG&A expenses
Amount of Gain Recognized in Income on Derivatives
$6,383
 
$—
 
$728
Transition Period
Transition Period
Transition Period
In February 2014, our Board of Directors approved a change in the Company's fiscal year (FY) end from December 31 to March 31. Accordingly, the Company is presenting audited financial statements for the quarter transition period ended March 31, 2014. The following table provides certain unaudited comparative financial information for the same period of the prior year.





 
Three Months Ended March 31,
 
2014
 
2013 (unaudited)
Net sales
$
294,716

 
$
263,760

Cost of sales
150,456

 
140,201

Gross profit
144,260

 
123,559

Selling, general and administrative expenses
144,668

 
120,907

(Loss) income from operations
(408
)
 
2,652

Other expense (income), net:
 
 
 

Interest income
(65
)
 
(26
)
Interest expense
516

 
339

Other, net
(117
)
 
(171
)
Total other expense
334

 
142

(Loss) income before income taxes
(742
)
 
2,510

Income tax expense
1,943

 
1,503

Net (loss) income
(2,685
)
 
1,007

Other comprehensive income (loss), net of tax:
 
 
 

Unrealized (loss) income on foreign currency hedging
(273
)
 
1,530

Foreign currency translation adjustment
873

 
(674
)
Total other comprehensive income
600

 
856

Comprehensive (loss) income
$
(2,085
)
 
$
1,863

 
 
 
 
Net (loss) income per share:
 

 
 

Basic
$
(0.08
)
 
$
0.03

Diluted
$
(0.08
)
 
$
0.03

Weighted-average common shares outstanding:
 
 
 

Basic
34,621,000

 
34,404,000

Diluted
34,621,000

 
34,788,000

Accumulated Other Comprehensive Loss
Accumulated Other Comprehensive Loss
Accumulated Other Comprehensive Loss
Accumulated balances of the components within accumulated other comprehensive loss are as follows:
 
3/31/2015
 
3/31/2014
 
12/31/2013
Cumulative foreign currency translation adjustment
$
(20,159
)
 
$
(1,284
)
 
$
(2,157
)
Unrealized loss on foreign currency hedging, net of tax
(309
)
 
(759
)
 
(486
)
Accumulated other comprehensive loss
$
(20,468
)
 
$
(2,043
)
 
$
(2,643
)
Business Segments, Concentration of Business, and Credit Risk and Significant Customers
Business Segments, Concentration of Business, and Credit Risk and Significant Customers
Business Segments, Concentration of Business, and Credit Risk and Significant Customers
The Company's accounting policies of the segments below are the same as those described in the summary of significant accounting policies (see Note 1), except that the Company does not allocate corporate overhead costs or non-operating income and expenses to segments. The Company evaluates segment performance primarily based on net sales and income (loss) from operations. The Company's reportable segments include the strategic business units for the worldwide wholesale operations of the UGG brand, Teva brand, Sanuk brand, and its other brands, its E-Commerce business and its retail store business. The wholesale operations of each brand are managed separately because each requires different marketing, research and development, design, sourcing, and sales strategies. The E-Commerce and retail store segments are managed separately because they are Direct-to-Consumer sales, while the brand segments are wholesale sales. The income (loss) from operations for each of the segments includes only those costs which are specifically related to each segment, which consist primarily of cost of sales, costs for research and development, design, selling and marketing, depreciation, amortization, and the costs of employees and their respective expenses that are directly related to each business segment. The unallocated corporate overhead costs include: costs of the distribution centers, certain executive and stock compensation, accounting and finance, legal, information technology, human resources, and facilities costs, among others. During the quarter ended (transition period) March 31, 2014, certain operating expenses were reclassified between segments. This change in segment reporting only changed the presentation within the below table and did not impact the Company's consolidated financial statements for any period. The segment information for prior periods have been adjusted retrospectively to conform to the current period presentation.
Beginning January 1, 2013, all gross profit derived from the sales to third parties of the E-Commerce and retail stores segments is reported in income from operations of the E-Commerce and retail stores segments, respectively. 
During the year ended March 31, 2015, the Company converted seven of its retail stores in China to partner retail stores, whereby, upon conversion, the stores became wholly-owned and operated by local, third-party companies within China.  These conversions included the assignment of the lease and the sale of both the Company's on-hand inventory and store leasehold improvements to the operator.  As of the date of conversion, partner retail stores sales are included in the UGG brand wholesale segment and not included in the retail stores segment.
The Company's other brands include Ahnu®, Hoka, MOZO® and TSUBO®. The results of operations for Hoka are included in the other brands segments beginning from the acquisition date of September 27, 2012. The wholesale operations of the Company's other brands are included as one reportable segment, "other brands wholesale", presented in the figures below. Business segment information is summarized as follows:
 
Year ended
 
Quarter ended (transition period)
 
Years ended
 
3/31/2015
 
3/31/2014
 
12/31/2013
 
12/31/2012
Net sales to external customers:
 
 
 
 
 
 
 
UGG wholesale
$
903,926

 
$
83,271

 
$
818,377

 
$
819,256

Teva wholesale
116,931

 
45,283

 
109,334

 
108,591

Sanuk wholesale
102,690

 
28,793

 
94,420

 
89,804

Other brands wholesale
76,152

 
18,662

 
38,276

 
20,194

E-Commerce
233,070

 
38,584

 
169,534

 
130,592

Retail stores
384,288

 
80,123

 
326,677

 
245,961

 
$
1,817,057

 
$
294,716

 
$
1,556,618

 
$
1,414,398

Income (loss) from operations:
 
 
 
 
 
 
 
UGG wholesale
$
269,489

 
$
13,595

 
$
224,738

 
$
206,039

Teva wholesale
13,320

 
6,425

 
9,166

 
9,228

Sanuk wholesale
21,914

 
7,530

 
20,591

 
14,398

Other brands wholesale
(9,838
)
 
(758
)
 
(9,807
)
 
(4,523
)
E-Commerce
92,392

 
13,272

 
66,849

 
56,190

Retail stores
57,928

 
7,646

 
65,683

 
63,306

Unallocated overhead
(220,786
)
 
(48,118
)
 
(169,323
)
 
(157,690
)
 
$
224,419

 
$
(408
)
 
$
207,897

 
$
186,948

Depreciation and amortization:
 
 
 
 
 
 
 
UGG wholesale
$
5,029

 
$
137

 
$
641

 
$
622

Teva wholesale
94

 
33

 
641

 
515

Sanuk wholesale
6,969

 
1,769

 
7,761

 
8,838

Other brands wholesale
940

 
250

 
507

 
1,622

E-Commerce
949

 
242

 
744

 
839

Retail stores
20,139

 
4,967

 
21,117

 
12,073

Unallocated overhead
15,030

 
3,140

 
9,959

 
8,911

 
$
49,150

 
$
10,538

 
$
41,370

 
$
33,420

Capital expenditures:
 
 
 
 
 
 
 
UGG wholesale
$
246

 
$
119

 
$
313

 
$
314

Teva wholesale
51

 
—

 
63

 
326

Sanuk wholesale
487

 
2

 
91

 
448

Other brands wholesale
351

 
26

 
477

 
197

E-Commerce
644

 
8

 
676

 
347

Retail stores
18,484

 
3,549

 
34,993

 
34,004

Unallocated overhead
71,590

 
13,916

 
43,217

 
25,966

 
$
91,853

 
$
17,620

 
$
79,830

 
$
61,602

Total assets from reportable segments:
 
 
 
 
 
 
 
UGG wholesale
$
194,720

 
$
153,341

 
$
314,122

 
$
377,997

Teva wholesale
77,423

 
81,766

 
54,868

 
59,641

Sanuk wholesale
224,974

 
214,627

 
208,669

 
209,861

Other brands wholesale
53,634

 
41,281

 
34,315

 
29,446

E-Commerce
4,485

 
3,129

 
7,331

 
5,058

Retail stores
142,938

 
160,535

 
182,491

 
134,804

 
$
698,174

 
$
654,679

 
$
801,796

 
$
816,807


Inter-segment sales from the Company’s wholesale segments to the Company’s E-Commerce and retail stores segments are at the Company’s cost, and there is no inter-segment profit on these inter-segment sales.  Income (loss) from operations of the wholesale segments does not include any inter-segment gross profit from sales to the E-Commerce and retail stores segments.
The assets allocable to each segment include accounts receivable, inventory, fixed assets, goodwill, other intangible assets, and certain other assets that are specifically identifiable with one of the Company's segments. Unallocated assets are the assets not specifically related to the segments and include cash and cash equivalents, deferred tax assets, and various other assets shared by the Company's segments. Reconciliations of total assets from reportable segments to the consolidated balance sheets are as follows:
 
3/31/2015
 
3/31/2014
 
12/31/2013
Total assets from reportable segments
$
698,174

 
$
654,679

 
$
801,796

Unallocated cash and cash equivalents
225,143

 
245,088

 
237,125

Unallocated deferred tax assets
29,083

 
38,933

 
35,632

Other unallocated corporate assets
217,533

 
125,504

 
185,176

Consolidated total assets
$
1,169,933

 
$
1,064,204

 
$
1,259,729


The Company does not consider international operations a separate segment, as management reviews such operations in the aggregate with the aforementioned segments. Long-lived assets, which consist of property and equipment, in the US and all other countries combined were as follows:
 
3/31/2015
 
3/31/2014
 
12/31/2013
US
$
196,513

 
$
148,178

 
$
136,726

All other countries*
35,804

 
36,392

 
37,340

Total
$
232,317

 
$
184,570

 
$
174,066


* No other country's long-lived assets comprised more than 10% of total long-lived assets as of March 31, 2015, March 31, 2014 and December 31, 2013.

The Company sells its products to customers throughout the US and to foreign customers located in Europe, Asia, Canada, Australia, and Latin America, among other regions. International sales were 35.9%, 32.7%, 33.0% and 31.2%, of the Company's total net sales for the year ended March 31, 2015, quarter ended March 31, 2014, and the years ended December 31, 2013 and 2012, respectively. For the year ended March 31, 2015, quarter ended March 31, 2014, and the years ended December 31, 2013 and 2012, no single foreign country comprised more than 10% of total sales.
Management performs regular evaluations concerning the ability of its customers to satisfy their obligations and records a provision for doubtful accounts based upon these evaluations. No single customer accounted for more than 10% of net sales in the year ended March 31, 2015, quarter ended March 31, 2014, and the years ended December 31, 2013 and 2012. As of March 31, 2015, March 31, 2014 and December 31, 2013 the Company had one customer representing 11.8%, 11.8% and 11.4% of net trade accounts receivable, respectively. At March 31, 2015, March 31, 2014 and December 31, 2013 the Company had a second customer representing 11.0%, 11.4% and 19.7% of net trade accounts receivable, respectively.
The Company's production is concentrated at a limited number of independent contractor factories in Asia. Sheepskin is the principal raw material for certain UGG products and the majority of sheepskin is purchased from two tanneries in China, which is sourced primarily from Australia and the United Kingdom. We began using a new raw material, UGGpure, a wool woven into a durable backing, in some of our UGG products in 2013 and which we currently purchase from one supplier. The other materials used by the Company in production are sourced primarily in Asia. The Company's operations are subject to the customary risks of doing business abroad, including, but not limited to, currency fluctuations, customs duties and related fees, various import controls and other nontariff barriers, restrictions on the transfer of funds, labor unrest and strikes and, in certain parts of the world, political instability. The supply of sheepskin can be adversely impacted by weather conditions, disease, and harvesting decisions that are completely outside the Company's control. Further, the price of sheepskin is impacted by demand, industry, and competitors.
A portion of the Company's cash and cash equivalents are held as cash in operating accounts that are with third-party financial institutions. These balances, at times, exceed the Federal Deposit Insurance Corporation (FDIC) insurance limits. While the Company regularly monitors the cash balances in its operating accounts and adjusts the balances as appropriate, these cash balances could be impacted if the underlying financial institutions fail or are subject to other adverse conditions in the financial markets.
The remainder of the Company's cash equivalents is invested in interest bearing funds managed by third-party investment management institutions. These investments can include US treasury bonds and securities, money market funds, and municipal bonds, among other investments. Certain of these investments are subject to general credit, liquidity, market, and interest rate risks. Investment risk has been and may further be exacerbated by US mortgage defaults, credit and liquidity issues, and sovereign debt concerns in Europe, which have affected various sectors of the financial markets. As of March 31, 2015, the Company had experienced no loss or lack of access to cash in its operating accounts, invested cash and cash equivalents. The Company's cash and cash equivalents are as follows:
 
3/31/2015
 
3/31/2014
 
12/31/2013
Money market fund accounts
$
127,900

 
$
143,816

 
$
154,105

Cash
97,243

 
101,272

 
83,020

Total cash and cash equivalents
$
225,143

 
$
245,088

 
$
237,125

Quarterly Summary of Information
Quarterly Summary of Information
Quarterly Summary of Information (Unaudited)
Summarized unaudited quarterly financial data are as follows:
 
Fiscal year 2015
 
6/30/2014
 
9/30/2014
 
12/31/2014
 
3/31/2015
Net sales
$
211,469

 
$
480,273

 
$
784,678

 
$
340,637

Gross profit
86,772

 
223,873

 
415,139

 
152,324

Net (loss) income
(37,062
)
 
40,730

 
156,706

 
1,406

Net (loss) income per share:
Basic
$
(1.07
)
 
$
1.18

 
$
4.54

 
$
0.04

Diluted
$
(1.07
)
 
$
1.17

 
$
4.50

 
$
0.04

 
Fiscal year 2013
 
3/31/2013
 
6/30/2013
 
9/30/2013
 
12/31/2013
Net sales
$
263,760

 
$
170,085

 
$
386,725

 
$
736,048

Gross profit
123,559

 
69,832

 
166,892

 
376,200

Net income (loss)
1,007

 
(29,275
)
 
33,060

 
140,897

Net income (loss) per share:
Basic
$
0.03

 
$
(0.85
)
 
$
0.96

 
$
4.08

Diluted
$
0.03

 
$
(0.85
)
 
$
0.95

 
$
4.04

Schedule II VALUATION AND QUALIFYING ACCOUNTS
Schedule II VALUATION AND QUALIFYING ACCOUNTS
 
Year ended
 
Quarter ended (transition period)
 
Years ended
 
3/31/2015
 
3/31/2014
 
12/31/2013
 
12/31/2012
Allowance for doubtful accounts (1)
 
 
 
 
 
 
 
Balance at Beginning of Period
$
1,798

 
$
2,039

 
$
2,782

 
$
1,719

Additions
1,107

 
594

 
125

 
2,128

Deductions
608

 
835

 
868

 
1,065

Balance at End of Period
$
2,297

 
$
1,798

 
$
2,039

 
$
2,782

Allowance for sales discounts (2)
 
 
 
 
 
 
 
Balance at Beginning of Period
$
2,121

 
$
3,540

 
$
3,836

 
$
4,629

Additions
68,620

 
978

 
46,989

 
35,759

Deductions
68,393

 
2,397

 
47,285

 
36,552

Balance at End of Period
$
2,348

 
$
2,121

 
$
3,540

 
$
3,836

Allowance for sales returns (3)
 
 
 
 
 
 
 
Balance at Beginning of Period
$
8,586

 
$
14,554

 
$
12,905

 
$
11,313

Additions
94,138

 
674

 
67,800

 
53,165

Deductions
93,192

 
6,642

 
66,151

 
51,573

Balance at End of Period
$
9,532

 
$
8,586

 
$
14,554

 
$
12,905

Chargeback allowance (4)
 
 
 
 
 
 
 
Balance at Beginning of Period
$
3,064

 
$
4,935

 
$
5,563

 
$
4,031

Additions
2,610

 
213

 
187

 
5,879

Deductions
1,633

 
2,084

 
815

 
4,347

Balance at End of Period
$
4,041

 
$
3,064

 
$
4,935

 
$
5,563


(1)
The additions to the allowance for doubtful accounts represent the estimates of our bad debt expense based upon the factors for which we evaluate the collectability of our accounts receivable, with actual recoveries netted into additions. Deductions are the actual write offs of the receivables.
(2)
The additions to the allowance for sales discounts represent estimates of discounts to be taken by our customers based upon the amount of available outstanding terms discounts in the year-end aging. Deductions are the actual discounts taken by our customers.
(3)
The additions to the allowance for returns represent estimates of returns based upon our historical returns experience. Deductions are the actual returns of products.
(4)
The additions to the chargeback allowance represent chargebacks taken in the respective year as well as an estimate of chargebacks related to sales in the respective reporting period that will be taken subsequent to the respective reporting period. Deductions are the actual chargebacks written off against outstanding accounts receivable. For the fiscal years 2015, 2013 and 2012 and the transition period quarter ended March 31, 2014, the Company has estimated the additions and deductions by netting each quarter's change and summing the four quarters for the respective year.
   
See accompanying report of independent registered public accounting firm.
The Company and Summary of Significant Accounting Policies (Policies)
Company and Basis of Presentation 
The Company and Basis of Presentation
The consolidated financial statements include the accounts of Deckers Outdoor Corporation and its wholly-owned subsidiaries (collectively referred to as the "Company"). Accordingly, all references herein to Deckers Outdoor Corporation or "Deckers" include the consolidated results of the Company and its subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.
Deckers Outdoor Corporation is a global leader in designing, marketing and distributing innovative footwear, apparel and accessories developed for both everyday casual lifestyle use and high performance activities.  The Company's business is seasonal, with the highest percentage of UGG® brand net sales occurring in the quarters ending September 30 and December 31 and the highest percentage of Teva® and Sanuk® brand net sales occurring in the quarters ending March 31 and June 30 of each year. The other brands do not have a significant seasonal impact on the Company.
Prior to April 2, 2012, the Company owned 51% of a joint venture with an affiliate of Stella International Holdings Limited (Stella International) for the primary purpose of opening and operating retail stores for the UGG brand in China. Stella International is also one of the Company's major manufacturers in China. On April 2, 2012, the Company purchased the 49% noncontrolling interest owned by Stella International for a total purchase price of approximately $20,000. The Company accounted for this transaction as an acquisition of the remaining interest of an entity that had already been majority-owned by the Company. The purchase resulted in a reduction to additional paid in capital of $14,037 representing excess purchase price over the carrying amount of the noncontrolling interest. Prior to this purchase, the Company already had a controlling interest in this entity, and therefore, the subsidiary had been and continues to be consolidated with the Company's operations.
In May 2012, the Company purchased a noncontrolling interest in the Hoka One One® (Hoka) brand, a privately held footwear company, which was accounted for as an equity method investment. In September 2012, the Company acquired the remaining ownership interest in Hoka. The acquisition of Hoka was not material to the Company’s consolidated financial statements and does not have a significant seasonal impact on the Company.
In February 2014, our Board of Directors approved a change in the Company's fiscal year end from December 31 to March 31. The change was intended to better align the Company's planning, financial and reporting functions with the seasonality of the business. The 2015, 2013 and 2012 fiscal years ended on March 31, 2015, December 31, 2013 and December 31, 2012, respectively. The transition period was the quarter ended March 31, 2014 to coincide with the change in our fiscal year end.
In July 2014, the Company acquired its UGG brand distributor that sold to retailers in Germany and now operates a wholesale business in Germany through the newly acquired subsidiary. The acquisition included certain intangible and tangible assets and the assumption of liabilities. The purchase price of the acquisition was not material to the Company’s consolidated financial statements.
In April 2015, the Company acquired inventory and certain intangible assets, including the trade name related to the Koolaburra® brand, a sheepskin and wool based footwear brand. The purchase price of the acquisition was not material to the Company’s consolidated financial statements.
  
We sell our brands through quality domestic retailers and international distributors and retailers, as well as directly to our end-user consumers through our E-Commerce business and retail stores. Independent third parties manufacture all of our products.
Inventories 
Inventories
Inventories, principally finished goods, are stated at the lower of cost (first-in, first-out) or market (net realizable value). Cost includes initial molds and tooling that are amortized over the life of the mold in cost of sales. Cost also includes shipping and handling fees and costs, which are subsequently expensed to cost of sales. Market values are determined by historical experience with discounted sales, industry trends, and the retail environment.
Revenue Recognition 
Revenue Recognition
The Company recognizes wholesale, E-Commerce, and international distributor revenue when products are shipped and retail revenue at the point of sale. All sales are recognized when the customer takes title and assumes risk of loss, collection of the related receivable is reasonably assured, persuasive evidence of an arrangement exists, and the sales price is fixed or determinable. For wholesale and international distributor sales, allowances for estimated returns, discounts, chargebacks, and bad debts are provided for when related revenue is recorded. For E-Commerce sales, allowances for estimated returns and bad debts are provided for when related revenue is recorded. For retail sales, allowances for estimated returns are provided for when related revenue is recorded. Amounts billed for shipping and handling costs are recorded as a component of net sales, while the related costs paid to third-party shipping companies are recorded as a cost of sales. The Company presents revenue net of taxes collected from customers and remitted to governmental authorities.
Accounting for Long-Lived Assets 
Accounting for Long-Lived Assets
Other long-lived assets, such as machinery and equipment, leasehold improvements, and purchased intangibles subject to amortization, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount to estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount exceeds the estimated future cash flows, an impairment charge is recognized for the amount by which the carrying amount exceeds the fair value of the asset. Intangible assets subject to amortization are amortized over their respective estimated useful lives to their estimated residual values. The Company uses the straight-line method for depreciation and amortization of long-lived assets, except for certain intangible assets where the Company can reliably determine the pattern in which the economic benefits of the assets will be consumed.
At least quarterly, the Company evaluates whether any impairment triggering events, including the following, have occurred which would require such asset groups to be tested for impairment:
•
A significant decrease in the market price of a long-lived asset group;
•
a significant adverse change in the extent or manner in which a long-lived asset group is being used or in its physical condition;
•
a significant adverse change in legal factors or in business climate that could affect the value of a long-lived asset group, including an adverse action or assessment by a regulator;
•
an accumulation of costs significantly in excess of the amount originally expected for the acquisition or construction of a long-lived asset group;
•
a current-period operating or cash flow loss combined with a history of operating or cash flow losses or a projection or forecast that demonstrates continuing losses associated with the use of a long-lived asset group; or
•
a current expectation that, more likely than not, a long-lived asset group will be sold or otherwise disposed of significantly before the end of its previously estimated useful life.
When an impairment triggering event has occurred, the Company tests for recoverability of the asset group's carrying value using estimates of undiscounted future cash flows based on the existing service potential of the applicable asset group. In determining the service potential of a long-lived asset group, the Company considers its remaining useful life, cash-flow generating capacity, and physical output capacity. These estimates include the undiscounted cash flows associated with future expenditures necessary to maintain the existing service potential. Long-lived assets are grouped with other assets and liabilities at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities. The Company assesses potential impairment of its retail group long-lived assets by comparing trailing twelve month (TTM) store cash flows to the current carrying value of the store's long-lived assets. Stores that have been opened for more than one year, or have otherwise been identified by management as having one or more indicators of impairment, with TTM cash flows less than the current carrying amount of the store's long-lived assets are then reviewed to determine if an impairment exists. An impairment loss, if any, would only reduce the carrying amount of long-lived assets in the group based on the fair value of the group assets.
Goodwill and Other Intangible Assets 
Goodwill and Other Intangible Assets
Intangible assets consist primarily of goodwill, trademarks, customer and distributor relationships, patents, lease rights, and non-compete agreements arising from the application of purchase accounting. Intangible assets with estimable useful lives are amortized and reviewed for impairment. Goodwill and intangible assets with indefinite useful lives are not amortized, but are tested for impairment at least annually, as of December 31, except for the Teva trademarks and Sanuk goodwill, which are tested as of October 31.
The assessment of goodwill impairment involves valuing the Company's reporting units that carry goodwill. Currently, the Company's reporting units are the same as the Company's operating segments. The Company first assesses qualitative factors to determine whether it is necessary to perform the two-step quantitative goodwill impairment test. The Company does not calculate the fair value of the reporting unit unless the Company determines, based on a qualitative assessment, that it is more likely than not that its fair value is less than its carrying amount. If the Company determines this, then the first quantitative step is a comparison of the fair value of the reporting unit with its carrying amount. If the fair value exceeds the carrying amount, goodwill is not impaired. If the fair value of the reporting unit is below the carrying amount, then a second step is performed to measure the amount of the impairment, if any. The test for impairment involves the use of estimates related to the fair values of the business operations with which goodwill is associated and the fair values of the intangible assets with indefinite lives.
The Company also evaluates the fair values of other intangible assets with indefinite useful lives in relation to their carrying values. The Company first assesses qualitative factors to determine whether it is necessary to perform a quantitative assessment of the indefinite life intangible asset. The Company does not calculate the fair value of the indefinite life intangible unless the Company determines, based on a qualitative assessment, that it is more likely than not that its fair value is less than its carrying amount. If the Company concludes that it is more likely than not that its fair value is less than its carrying amount, then the Company compares the fair value of the indefinite life intangible to its carrying amount, and if the fair value of the indefinite life intangible exceeds its carrying amount, no impairment charge will be recognized. If the fair value of the indefinite life intangible is less than the carrying amount, the Company will record an impairment charge to write-down the intangible asset to its fair value.
Determining fair value of goodwill and other intangible assets is highly subjective and requires the use of estimates and assumptions. The Company uses estimates including future revenues, royalty rates, discount rates, attrition rates, and market multiples, among others. The Company also considers the following factors:
•
the assets' ability to continue to generate income from operations and positive cash flow in future periods;
•
changes in consumer demand or acceptance of the related brand names, products, or features associated with the assets; and
•
other considerations that could affect fair value or otherwise indicate potential impairment.
In addition, facts and circumstances could change, including further deterioration of general economic conditions or the retail environment, customers reducing orders in response to such conditions, and increased competition. These or other factors could result in changes to the calculation of fair value which could result in impairment of the Company's remaining goodwill and other intangible assets. Changes in any one or more of these estimates and assumptions could produce different financial results.
Property and Equipment, Depreciation and Amortization 
Property and Equipment, Depreciation and Amortization
Property and equipment has a useful life expectancy of at least one year. Property and equipment includes tangible, non-consumable items owned by the Company valued at or above $3, certain computer software costs and internal or external computer system consulting work valued at or above $3 as defined below, and portable electronic devices valued at or above $1.5. Tangible, non-consumable items below these amounts are expensed. The value includes the purchase price, as well as costs to acquire (shipping and handling), sales tax, install (excluding site preparation costs), secure, and prepare the item for its intended use.
Depreciation of property and equipment is calculated using the straight-line method based on estimated useful lives. Machinery and equipment has estimated useful lives ranging from two to ten years, and furniture and fixtures has estimated useful lives ranging from three to seven years.  Capitalized website costs, which are included in the machinery & equipment category, are immaterial to the Company's consolidated financial statements. Leasehold improvements are amortized to their residual value on the straight-line basis over their estimated economic useful lives or the lease term, whichever is shorter. Leasehold improvement lives range from one to fifteen years. Buildings are depreciated over 39 years. The Company allocates depreciation and amortization of property, plant, and equipment to cost of sales and selling, general and administrative (SG&A) expenses. The majority of the Company's depreciation and amortization is included in SG&A expenses due to the nature of its operations. Most of the Company's depreciation and amortization is from its warehouses, its corporate headquarters and its retail stores. The Company outsources all manufacturing; therefore, the amount allocated to cost of sales is not material.
Fair Value Measurements 
Fair Value Measurements
The fair values of the Company's cash and cash equivalents, trade accounts receivable, prepaid expenses, income tax receivable and other current assets, short-term borrowings, trade accounts payable, accrued payroll, other accrued expenses, income taxes payable and the value added tax payable approximate the carrying values due to the relatively short maturities of these instruments. The fair values of the Company's long-term liabilities, other than contingent consideration, recalculated using current interest rates, would not significantly differ from the carrying values. The fair value of the contingent consideration related to acquisitions and of the Company's derivatives are measured and recorded at fair value on a recurring basis. Changes in fair value resulting from either accretion or changes in discount rates or in the expectations of achieving the performance targets are recorded in SG&A expenses. The Company records the fair value of assets or liabilities associated with derivative instruments and hedging activities in other current assets or other accrued expenses, respectively, in the consolidated balance sheets.
The inputs used in measuring fair value are prioritized into the following hierarchy:
•
Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities.
•
Level 2: Inputs other than quoted prices included within Level 1 that are either directly or indirectly observable.
•
Level 3: Unobservable inputs in which little or no market activity exists, therefore requiring an entity to develop its own assumptions about the assumptions that market participants would use in pricing an asset or liability.
Stock Compensation 
Stock Compensation
All of the Company's stock compensation issuances are classified within stockholders' equity. Stock compensation cost is measured at the grant date based on the value of the award and is expensed ratably over the vesting period. The Company recognizes expense only for those awards that management deems probable of achieving the performance and service objectives. Determining the expense of share-based awards requires judgment, including estimating the percentage of awards that will be forfeited and probabilities of meeting the awards' performance criteria. If actual forfeitures differ significantly from the estimates or if probabilities change during a period, stock compensation expense and the Company's results of operations could be materially impacted.
Nonqualified Deferred Compensation 
Nonqualified Deferred Compensation
In 2010, the Company established a nonqualified deferred compensation program that permits a select group of management employees to defer earnings to a future date on a nonqualified basis. For each plan year, on behalf of the Company, the Company's Board of Directors (the Board) may, but is not required to, contribute any amount it desires to any participant under this program. The Company's contribution will be determined by the Board annually. As of March 31, 2015, no such contribution has been approved by the Board . The value of the deferred compensation is recognized based on the fair value of the participants' accounts. The Company has established a rabbi trust for the purpose of supporting the benefits payable under this program.
Use of Estimates 
Use of Estimates
The preparation of the Company's consolidated financial statements in accordance with United States generally accepted accounting principles (US GAAP) requires management to make estimates and assumptions that affect the amounts reported in these consolidated financial statements and accompanying notes. Management bases these estimates and assumptions upon historical experience, existing and known circumstances, authoritative accounting pronouncements and other factors that management believes to be reasonable. Significant areas requiring the use of management estimates relate to inventory write-downs, accounts receivable allowances, returns liabilities, stock compensation, performance based compensation, impairment assessments, depreciation and amortization, income tax liabilities and uncertain tax positions, fair value of financial instruments, and fair values of acquired intangibles, assets and liabilities, including estimated contingent consideration payments. Actual results could differ materially from these estimates.
Research and Development Costs 
Research and Development Costs
All research and development costs are expensed as incurred. Such costs amounted to $20,872, $4,486, $19,257 and $15,617 for the year ended March 31, 2015, quarter ended March 31, 2014 and the years ended December 31, 2013 and 2012, respectively, and are included in SG&A expenses in the consolidated statements of comprehensive income (loss).
Advertising, Marketing, and Promotion Costs 
Advertising, Marketing, and Promotion Costs
Advertising production costs are expensed the first time the advertisement is run. All other costs of advertising, marketing, and promotion are expensed as incurred.
Rent Expense 
Rent Expense
Rent expense is recorded using the straight-line method to account for scheduled rental increases or rent holidays. Lease incentives for tenant improvement allowances are recorded as reductions of rent expense over the lease term. The rental payments under some of our retail store leases are based on a minimum rental plus a percentage of the store's sales in excess of stipulated amounts. Rent expenses are included SG&A expenses in the consolidated statements of comprehensive income (loss)
Income Taxes 
Income Taxes
Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred taxes of a change in tax rates is recognized in income in the period that includes the enactment date.
The Company recognizes the effect of income tax positions only if those positions are more likely than not of being sustained. Recognized income tax positions are measured at the largest amount that is greater than 50% likely of being realized. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs. The Company accounts for interest and penalties generated by income tax contingencies as interest expense and SG&A expenses, respectively in the consolidated statements of comprehensive income (loss).
Net Income (Loss) per Share Attributable to Deckers Outdoor Corporation Common Stockholders 
Net Income (Loss) per Share Attributable to Deckers Outdoor Corporation Common Stockholders
Basic net income (loss) per share represents net income (loss) attributable to Deckers Outdoor Corporation divided by the weighted-average number of common shares outstanding for the period. Diluted net income (loss) per share represents net income (loss) attributable to Deckers Outdoor Corporation divided by the weighted-average number of shares outstanding, including the dilutive impact of potential issuances of common stock.
Foreign Currency Translation 
Foreign Currency Translation
The Company considers the US dollar as its functional currency. The Company has certain wholly-owned foreign subsidiaries with functional currencies other than the US dollar. In most cases, the Company's foreign subsidiaries' local currency is the same as the designated functional currency. The Company holds a portion of its cash and other monetary assets and liabilities in currencies other than its subsidiary's functional currency, and is exposed to financial statement transaction gains and losses as a result of remeasuring the operating results and financial positions into their functional currency. The Company remeasures these monetary assets and liabilities using the exchange rate as of the end of the reporting period, which results in gains and losses that are included in SG&A expenses in the results of operations as incurred, except for gains and losses arising on intercompany foreign currency transactions that are of a long-term investment nature. In addition, the Company translates assets and liabilities of subsidiaries with reporting currencies other than US dollars into US dollars using the exchange rates at of the end of the reporting period, which results in financial statement translation gains and losses in other comprehensive income (loss)(OCI).
Derivative Instruments and Hedging Activities 
Derivative Instruments and Hedging Activities
The Company transacts business in various foreign currencies and has international sales and expenses denominated in foreign currencies, subjecting the Company to foreign currency risk. The Company may enter into foreign currency forward or option contracts, generally with maturities of 15 months or less, to reduce the volatility of cash flows primarily related to forecasted revenue denominated in certain foreign currencies. In addition, the Company utilizes foreign exchange forward and option contracts to mitigate foreign currency exchange rate risk associated with foreign currency-denominated assets and liabilities, primarily intercompany balances. The Company does not use foreign currency contracts for trading purposes.
Certain of the Company's foreign currency forward contracts are designated cash flow hedges of forecasted intercompany sales and are subject to foreign currency exposures. These contracts allow the Company to sell Euros, British Pounds and Yen in exchange for US dollars at specified contract rates. Forward contracts are used to hedge forecasted intercompany sales over specific quarters. Changes in the fair value of these forward contracts designated as cash flow hedges are recorded as a component of accumulated other comprehensive income (loss) within stockholders' equity, and are recognized in the consolidated statements of comprehensive income (loss) during the period which approximates the time the corresponding third-party sales occur. The Company may also enter into foreign exchange contracts that are not designated as hedging instruments for financial accounting purposes. These contracts are generally entered into to offset the gains and losses on certain intercompany balances until the expected time of repayment. Accordingly, any gains or losses resulting from changes in the fair value of the non-designated contracts are reported in SG&A expenses in the consolidated statements of comprehensive income (loss). The gains and losses on these contracts generally offset the gains and losses associated with the underlying foreign currency-denominated balances, which are also reported in SG&A expenses. See Note 8 for the impact of derivative instruments and hedging activities on the Company's consolidated financial statements.
The Company records the assets or liabilities associated with derivative instruments and hedging activities at fair value based on Level 2 inputs in other current assets or other current liabilities, respectively, in the consolidated balance sheets. The Level 2 inputs consist of forward spot rates at the end of the reporting period. The accounting for gains and losses resulting from changes in fair value depends on the use of the derivative and whether it is designated and qualifies for hedge accounting.
For all hedging relationships, the Company formally documents the hedging relationship and its risk management objective and strategy for undertaking the hedge, the hedging instrument, the hedged transaction, the nature of the risk being hedged, how the hedging instrument's effectiveness in offsetting the hedged risk will be assessed prospectively and retrospectively, and a description of the method used to measure ineffectiveness. The Company factors the nonperformance risk of the Company and the counterparty into the fair value measurements of its derivatives. The Company also formally assesses, both at the inception of the hedging relationship and on an ongoing basis, whether the derivatives that are used in hedging relationships are highly effective in offsetting changes in cash flows of hedged transactions. The Company assesses hedge effectiveness and measures hedge ineffectiveness at least quarterly. For derivative instruments that are designated and qualify as part of a cash flow hedging relationship, the effective portion of the gain or loss on the derivative is reported in OCI and reclassified into earnings in the same period or periods during which the hedged transaction affects earnings. Gains and losses on the derivative representing either hedge ineffectiveness or hedge components excluded from the assessment of effectiveness are recognized in current earnings.
The Company discontinues hedge accounting prospectively when it determines that the derivative is no longer effective in offsetting cash flows attributable to the hedged risk, the derivative expires or is sold, terminated, or exercised, the cash flow hedge is designated because a forecasted transaction is not probable of occurring, or management determines to remove the designation of the cash flow hedge. In all situations in which hedge accounting is discontinued and the derivative remains outstanding, the Company continues to carry the derivative at its fair value on the balance sheet and recognizes any subsequent changes in its fair value in earnings. When it is probable that a forecasted transaction will not occur, the Company discontinues hedge accounting and recognizes immediately in earnings gains and losses that were accumulated in OCI related to the hedging relationship.
Comprehensive Income (Loss) 
Comprehensive Income (Loss)
Comprehensive income (loss) is the total of net earnings and all other non-owner changes in equity. Except for net income (loss), foreign currency translation adjustments, and unrealized gains and losses on cash flow hedges, the Company does not have any transactions and other economic events that qualify as comprehensive income (loss).
Business Segment Reporting 
Business Segment Reporting
Management of the Company has determined its reportable segments are its strategic business units and it is by these segments that information is reported to the Chief Operating Decision Maker (CODM). The six reportable segments are the UGG, Teva, Sanuk and other brands wholesale divisions, the E-Commerce business, and the retail store business. The CODM is the Principal Executive Officer. The Company performs an annual analysis of the appropriateness of its reportable segments. Information related to the Company's business segments is summarized in Note 11.
Cash Equivalents 
Cash Equivalents
The Company considers all highly liquid investments with original maturities of three months or less to be cash equivalents.
New Accounting Pronouncements 
Recent Accounting Pronouncements
On May 28, 2014, FASB issued Accounting Standards Update (ASU) No. 2014-09, Revenue from Contracts with Customers, which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The ASU will replace most existing revenue recognition guidance in US GAAP when it becomes effective. The new standard is effective for the Company on April 1, 2017. Early application is not permitted. The standard permits the use of either the retrospective or cumulative effect transition method. The Company is evaluating the effect that ASU 2014-09 will have on its consolidated financial statements and related disclosures. The Company has not yet selected a transition method nor has it determined the effect of the standard on its ongoing financial reporting. Subsequent to March 31, 2015, the FASB proposed a one year deferral of the effective date of ASU No. 2014-09.

Subsequent to March 31, 2015, FASB issued ASU No. 2015-03, Simplifying the Presentation of Debt Issuance Costs, which requires an entity to present debt issuance costs on the balance sheet as a direct deduction from the carrying value of the associated debt liability, consistent with the presentation of a debt discount. Prior to the issuance of the standard, debt issuance costs were required to be presented in the balance sheet as a deferred charge (i.e., an asset). This ASU is effective for the Company on April 1, 2016, with early adoption permitted. The adoption of this ASU will only change the presentation of prepaid expenses, other assets and short-term borrowings in the Company’s consolidated balance sheet. The Company is considering early adoption of this update during its fiscal year 2016.
The Company and Summary of Significant Accounting Policies (Tables)
Schedule of Company's financial assets and liabilities measured on a recurring basis at fair value 
The tables below summarize the Company's financial liabilities and assets that are measured on a recurring basis at fair value:
 
Fair Value at March 31, 2015
 
Fair Value Measurement Using
 
Level 1
 
Level 2
 
Level 3
Assets (Liabilities) at fair value
 
 
 
 
 
 
 
Nonqualified deferred compensation asset
$
5,581

 
$
5,581

 
$
—

 
$
—

Nonqualified deferred compensation liability
$
(5,581
)
 
$
(5,581
)
 
$
—

 
$
—

Designated derivatives liability
$
(487
)
 
$
—

 
$
(487
)
 
$
—

Contingent consideration for acquisition of business
$
(26,000
)
 
$
—

 
$
—

 
$
(26,000
)
 
Fair Value at March 31, 2014
 
Fair Value Measurement Using
 
Level 1
 
Level 2
 
Level 3
Assets (Liabilities) at fair value
 
 
 
 
 
 
 
Nonqualified deferred compensation asset
$
4,534

 
$
4,534

 
$
—

 
$
—

Nonqualified deferred compensation liability
$
(4,534
)
 
$
(4,534
)
 
$
—

 
$
—

Designated derivatives liability
$
(832
)
 
$
—

 
$
(832
)
 
$
—

Contingent consideration for acquisition of business
$
(30,000
)
 
$
—

 
$
—

 
$
(30,000
)

 
Fair Value at December 31, 2013
 
Fair Value Measurement Using
 
Level 1
 
Level 2
 
Level 3
Assets (Liabilities) at fair value
 
 
 
 
 
 
 
Nonqualified deferred compensation asset
$
4,410

 
$
4,410

 
$
—

 
$
—

Nonqualified deferred compensation liability
$
(4,410
)
 
$
(4,410
)
 
$
—

 
$
—

Designated derivatives liability
$
(550
)
 
$
—

 
$
(550
)
 
$
—

Contingent consideration for acquisition of business
$
(48,000
)
 
$
—

 
$
—

 
$
(48,000
)
Schedule of reconciliation of beginning and ending amounts related to the fair value for contingent consideration for acquisition of business, categorized as Level 3 
The following table presents a reconciliation of the Level 3 measurement (rounded):
Beginning balance, January 1, 2013
$
71,500

Payments
(25,400
)
Change in fair value
1,900

Balance, December 31, 2013
$
48,000

Payments
(19,000
)
Change in fair value
1,000

Balance, March 31, 2014
$
30,000

Payments
(500
)
Change in fair value
(3,500
)
Balance, March 31, 2015
$
26,000

Schedule of reconciliations of basic to diluted weighted-average common shares outstanding 
The reconciliations of basic to diluted weighted-average common shares outstanding were as follows:
 
Year ended
 
Quarter ended (transition period)
 
Years ended
 
3/31/2015
 
3/31/2014
 
12/31/2013
 
12/31/2012
Weighted-average shares used in basic computation
34,433,000

 
34,621,000

 
34,473,000

 
36,879,000

Dilutive effect of stock-based awards*
300,000

 
—

 
356,000

 
455,000

Weighted-average shares used for diluted computation
34,733,000

 
34,621,000

 
34,829,000

 
37,334,000

 
 
 
 
 
 
 
 


*Excluded NSUs
—

 
331,000

 
—

 
200,000

*Excluded RSUs
624,000

 
729,000

 
795,000

 
671,000

*Excluded outside director RSAs
—

 
6,000

 
—

 
—

*Excluded SARs
525,000

 
730,000

 
525,000

 
525,000

Property and Equipment (Tables)
Schedule of property and equipment
Property and equipment is summarized as follows:
 
 
 
 
 
 
 
3/31/2015
 
3/31/2014
 
12/31/2013
Land
$
25,543

 
$
25,531

 
$
19,954

Buildings
38,841

 
36,387

 
—

Machinery and equipment
158,136

 
98,035

 
84,941

Furniture and fixtures
36,751

 
31,085

 
25,961

Leasehold improvements
102,048

 
96,622

 
142,683

 
361,319

 
287,660

 
273,539

Less accumulated depreciation and amortization
129,002

 
103,090

 
99,473

Net property and equipment
$
232,317

 
$
184,570

 
$
174,066

Goodwill and Other Intangible Assets (Tables)
Schedule of goodwill and other intangible assets 
The Company's goodwill and other intangible assets are summarized as follows:
 
3/31/2015
 
3/31/2014
 
12/31/2013
Intangibles subject to amortization
 
 
 
 
 
Weighted-Average Amortization Period
13 years

 
14 years

 
14 years

Gross Carrying Amount
$
109,604

 
$
101,982

 
$
101,963

Accumulated Amortization
37,316

 
26,026

 
24,140

Net Carrying Amount
72,288

 
75,956

 
77,823

Intangibles not subject to amortization
 
 
 
 
 
Goodwill
127,934

 
127,934

 
128,725

Trademarks
15,455

 
15,455

 
15,455

Total goodwill and other intangible assets
$
215,677

 
$
219,345

 
$
222,003

Schedule of changes in goodwill 
Changes in the Company's goodwill are summarized as follows:
 
Goodwill,
Gross
 
Accumulated
Impairment
 
Goodwill, Net
Balance at January 1, 2013
$
144,556

 
$
(15,831
)
 
$
128,725

Changes related to additions, impairments and other adjustments
—

 
—

 
—

Balance at December 31, 2013
144,556

 
(15,831
)
 
128,725

Adjustments related to prior acquisitions
(791
)
 
—

 
(791
)
Balance at March 31, 2014
143,765

 
(15,831
)
 
127,934

Changes related to additions, impairments and other adjustments
—

 
—

 
—

Balance at March 31, 2015
$
143,765

 
$
(15,831
)
 
$
127,934

Schedule of total goodwill by segment 
The Company's goodwill by segment is as follows:
 
3/31/2015
 
3/31/2014
 
12/31/2013
UGG brand
$
6,101

 
$
6,101

 
$
6,101

Sanuk brand
113,944

 
113,944

 
113,944

Other brands
7,889

 
7,889

 
8,680

Total
$
127,934

 
$
127,934

 
$
128,725

Schedule of expected amortization expense on existing intangible assets 
The following table summarizes the expected amortization expense on existing intangible assets, excluding indefinite-lived intangible assets of $8,044 and trademarks of $15,455, for the next five years:
Year ending March 31,
 
2016
$
9,358

2017
8,361

2018
6,278

2019
5,621

2020
3,813

Thereafter
30,813

 
$
64,244

Income Taxes (Tables)
Components of income taxes 
Components of income tax expense (benefit) are as follows:
 
Year ended
 
Quarter ended (transition period)
 
Years ended
 
3/31/2015
 
3/31/2014
 
12/31/2013
 
12/31/2012
Current:
 
 
 
 
 
 
 
Federal
$
35,459

 
$
(572
)
 
$
51,058

 
$
50,911

State
6,861

 
(4
)
 
6,252

 
6,482

Foreign
7,069

 
5,255

 
6,650

 
3,368

Total
49,389

 
4,679

 
63,960

 
60,761

Deferred:
 
 
 
 
 
 
 
Federal
8,234

 
1,669

 
(2,580
)
 
(6,083
)
State
624

 
(1
)
 
(209
)
 
414

Foreign
1,112

 
(4,404
)
 
(1,303
)
 
12

Total
9,970

 
(2,736
)
 
(4,092
)
 
(5,657
)
Income tax expense
$
59,359

 
$
1,943

 
$
59,868

 
$
55,104

Actual income taxes differed from that obtained by applying the statutory federal income tax rate to income before income taxes 
Actual income taxes differed from that obtained by applying the statutory federal income tax rate to income before income taxes as follows:
 
Year ended
 
Quarter ended (transition period)
 
Years ended
 
3/31/2015
 
3/31/2014
 
12/31/2013
 
12/31/2012
Computed expected income taxes
$
77,399

 
$
(260
)
 
$
71,945

 
$
64,282

State income taxes, net of federal income tax benefit
3,564

 
90

 
4,435

 
3,562

Foreign rate differential
(25,535
)
 
1,904

 
(16,399
)
 
(12,908
)
Unrecognized tax benefits
3,566

 
—

 
—

 
—

Other
365

 
209

 
(113
)
 
168

 
$
59,359

 
$
1,943

 
$
59,868

 
$
55,104

Tax effects of temporary differences that give rise to significant portions of deferred tax assets and deferred tax liabilities 
The tax effects of temporary differences that give rise to significant portions of deferred tax assets and deferred tax liabilities are presented below:
 
3/31/2015
 
3/31/2014
 
12/31/2013
Deferred tax assets (liabilities), current:
 
 
 
 
 
Uniform capitalization adjustment to inventory
$
4,040

 
$
4,114

 
$
5,492

Bad debt and other reserves
8,984

 
9,901

 
10,655

State taxes
482

 
(1,739
)
 
508

Prepaid expenses
(3,546
)
 
(2,217
)
 
(2,193
)
Accrued bonus
4,120

 
2,093

 
5,071

Foreign currency hedge
434

 
305

 
348

Net operating loss carry forwards
—

 
9,414

 
—

Other
(448
)
 
—

 
—

Total deferred tax assets, current
14,066

 
21,871

 
19,881

Deferred tax assets (liabilities), noncurrent:
 
 
 
 
 
Amortization and impairment of intangible assets
1,004

 
5,267

 
4,603

Depreciation of property and equipment
(6,148
)
 
(4,833
)
 
(6,034
)
Share-based compensation
12,044

 
10,638

 
11,226

Foreign currency translation
720

 
382

 
667

Deferred rent
4,885

 
4,290

 
4,028

Acquisition costs
764

 
756

 
755

Other
1,327

 
128

 
—

Net operating loss carry forwards
421

 
434

 
506

Total deferred tax assets, noncurrent
15,017

 
17,062

 
15,751

Net deferred tax assets
$
29,083

 
$
38,933

 
$
35,632

Reconciliation of the beginning and ending amounts of total unrecognized tax benefits 
A reconciliation of the beginning and ending amounts of total unrecognized tax benefits is as follows:
Balance at January 1, 2013
$
—

Gross change related to current and prior years' tax positions
—

Balance, December 31, 2013
$
—

Gross change related to current and prior years' tax positions
—

Balance, March 31, 2014
$
—

Gross increase related to current year tax positions
1,293

Gross increase related to prior year tax positions
3,374

Balance, March 31, 2015
$
4,667

Commitments and Contingencies (Tables)
Schedule of future minimum commitments under the operating lease agreements 
Future minimum commitments under the lease agreements are as follows:
Year ending March 31,
 
2016
$
53,664

2017
55,325

2018
49,357

2019
39,293

2020
32,809

Thereafter
118,451

 
$
348,899

Component of total rental expense 
The following schedule shows the composition of total rental expense.
 
Year ended
 
Quarter ended (transition period)
 
Years ended
 
3/31/2015
 
3/31/2014
 
12/31/2013
 
12/31/2012
Minimum rentals
$
61,363

 
$
14,260

 
$
47,871

 
$
37,270

Contingent rentals
14,707

 
3,099

 
12,318

 
9,366

 
$
76,070

 
$
17,359

 
$
60,189

 
$
46,636

Schedule of future commitments under purchase orders and other agreements 
The contracts do not permit net settlement. Minimum commitments for these contracts as of March 31, 2015 were as follows:

Contract
Effective Date
 
Final
Target Date
 
Advance
Deposit
 
Total
Minimum
Commitment
 
Remaining
Deposit
 
Remaining
Commitment,
Net of Deposit
October 2011
 
September 2015
 
$50,000
 
$286,000
 
$13,783
 
—
October 2014
 
September 2015
 
—
 
$51,240
 
—
 
$32,487
September 2014
 
September 2015
 
—
 
$47,960
 
—
 
$15,434
Stockholders' Equity (Tables)
Summary of stock compensation amounts recognized in the consolidated statements of comprehensive income 
The table below summarizes stock compensation amounts recognized in the consolidated statements of comprehensive income (loss):
 
Year ended
 
Quarter ended (transition period)
 
Years ended
 
3/31/2015
 
3/31/2014
 
12/31/2013
 
12/31/2012
Compensation expense recorded for:
 
 
 
 
 
 
 
NSUs
$
9,295

 
$
1,863

 
$
10,545

 
$
11,849

SARs
1,846

 
381

 
1,302

 
1,501

RSUs
1,323

 
354

 
287

 
231

Directors' shares
1,060

 
267

 
1,002

 
1,080

Total compensation expense
13,524

 
2,865

 
13,136

 
14,661

Income tax benefit recognized
(5,143
)
 
(1,082
)
 
(4,950
)
 
(5,573
)
Net compensation expense
$
8,381

 
$
1,783

 
$
8,186

 
$
9,088

Summary of the total remaining unrecognized compensation cost related to nonvested awards, that are considered probable of vesting and the weighted-average period over which the cost is expected to be recognized 
The table below summarizes the total remaining unrecognized compensation cost related to nonvested awards that are considered probable of vesting as of March 31, 2015, and the weighted-average period over which the cost is expected to be recognized as of March 31, 2015:
 
Unrecognized
Compensation
Cost
 
Weighted-Average
Remaining
Vesting Period (Years)
NSUs
$
13,917

 
1.5
SARs
1,355

 
0.9
RSUs
6,317

 
1.5
Total
$
21,589

 
 
Summary of Nonvested Stock Units Issued Under the 2006 Plan 
 
Number of
Shares
 
Weighted-
Average
Grant-Date
Fair Value
Nonvested at January 1, 2012
677,000

 
$
48.14

Granted
209,000

 
63.18

Vested
(297,000
)
 
35.90

Forfeited
(18,000
)
 
63.68

Cancelled*
(200,000
)
 
62.17

Nonvested at December 31, 2012
371,000

 
$
58.51

Granted
304,000

 
57.30

Vested
(315,000
)
 
53.19

Forfeited
(20,000
)
 
61.08

Nonvested at December 31, 2013
340,000

 
$
62.23

Granted
—

 
—

Vested
(2,000
)
 
58.11

Forfeited
(7,000
)
 
64.15

Nonvested at March 31, 2014
331,000

 
$
62.21

Granted
196,000

 
82.34

Vested
(142,000
)
 
68.39

Forfeited
(30,000
)
 
64.18

Cancelled*
(15,000
)
 
84.04

Nonvested at March 31, 2015
340,000

 
$
70.11


*     Nonvested Stock Units cancelled during the period represent awards granted whose performance criteria were not met.
Summary of Stock Appreciation Rights Issued Under the 2006 Plan 
 
Number of
SARs
 
Weighted-
Average
Exercise
Price
 
Weighted-
Average
Remaining
Contractual
Term
(Years)
 
Aggregate
Intrinsic
Value
Outstanding at January 1, 2012
760,000

 
$
26.73

 
8.8
 
$
37,118

Granted
—

 
—

 
 
 
 
Exercised
(15,000
)
 
26.73

 
 
 
 
Forfeited
—

 
—

 
 
 
 
Outstanding at December 31, 2012
745,000

 
$
26.73

 
7.9
 
$
10,087

Granted
—

 
—

 
 
 
 
Exercised
(15,000
)
 
26.73

 
 
 
 
Forfeited
—

 
—

 
 
 
 
Outstanding at December 31, 2013
730,000

 
$
26.73

 
6.9
 
$
42,143

Granted
—

 
—

 
 
 
 
Exercised
—

 
—

 
 
 
 
Forfeited
—

 
—

 
 
 
 
Outstanding at March 31, 2014
730,000

 
$
26.73

 
6.7
 
$
38,690

Granted
—

 
—

 
 
 
 
Exercised
(15,000
)
 
26.73
 
 
 
 
Forfeited
—

 
—

 
 
 
 
Outstanding at March 31, 2015
715,000

 
$
26.73

 
5.8
 
$
32,990

Exercisable at March 31, 2015
190,000

 
$
26.73

 
2.1
 
$
8,767

Expected to vest and exercisable at March 31, 2015
702,000

 
$
26.73

 
5.8
 
$
32,396

Summary of Restricted Stock Units Issued Under the 2006 Plan 
 
Number of
Shares
 
Weighted-
Average
Grant-Date
Fair Value
Nonvested at January 1, 2012
319,000

 
$
70.15

Granted
352,000

 
56.12

Vested
—

 
—

Forfeited
—

 
—

Nonvested at December 31, 2012
671,000

 
$
62.80

Granted
156,000

 
84.52

Vested
—

 
—

Forfeited
(32,000
)
 
63.69

Nonvested at December 31, 2013
795,000

 
$
67.03

Granted
—

 
—

Vested
—

 
—

Forfeited
(66,000
)
 
67.23

Nonvested at March 31, 2014
729,000

 
$
67.01

Granted
160,000

 
98.29

Vested
—

 
—

Forfeited
(35,000
)
 
78.39

Cancelled
(230,000
)
 
82.09
Nonvested at March 31, 2015
624,000

 
$
68.82

Foreign Currency Exchange Contracts and Hedging (Tables)
Schedule of location and amount of gains and losses related to derivatives designated as hedging instruments reported in consolidated financial statements 
The following tables summarize the effect of derivative instruments on the consolidated financial statements:
 
Year ended
 
Quarter ended (transition period)
 
Year ended
 
3/31/2015
 
3/31/2014
 
12/31/2013
Derivatives in Designated Cash Flow Hedging Relationships
Foreign Exchange Contracts
 
Foreign Exchange Contracts
 
Foreign Exchange Contracts
Amount of Gain (Loss) Recognized in OCI on Derivative (Effective Portion)
$1,556
 
$(47)
 
$(779)
Location of Gain (Loss) Reclassified from Accumulated OCI into Income (Effective Portion)
Net Sales
 
Net Sales
 
Net Sales
Amount of Gain (Loss) Reclassified from Accumulated OCI into Income (Effective Portion)
$1,226
 
$(283)
 
$17
Location of Amount Excluded from Effectiveness Testing
SG&A expenses
 
SG&A expenses
 
SG&A expenses
Gain (Loss) from Amount Excluded from Effectiveness Testing
$(69)
 
$(31)
 
$(11)
Schedule of location and amount of gains and losses related to derivatives not designated as hedging instruments reported in consolidated financial statements 
 
Year ended
 
Quarter ended (transition period)
 
Year ended
 
3/31/2015
 
3/31/2014
 
12/31/2013
Derivatives Not Designated as Hedging Instruments
Foreign Exchange Contracts
 
Foreign Exchange Contracts
 
Foreign Exchange Contracts
Location of Gain (Loss) Recognized in Income on Derivatives
SG&A expenses
 
SG&A expenses
 
SG&A expenses
Amount of Gain Recognized in Income on Derivatives
$6,383
 
$—
 
$728


Transition Period (Tables)
Transition Period Statement of Income
The following table provides certain unaudited comparative financial information for the same period of the prior year.





 
Three Months Ended March 31,
 
2014
 
2013 (unaudited)
Net sales
$
294,716

 
$
263,760

Cost of sales
150,456

 
140,201

Gross profit
144,260

 
123,559

Selling, general and administrative expenses
144,668

 
120,907

(Loss) income from operations
(408
)
 
2,652

Other expense (income), net:
 
 
 

Interest income
(65
)
 
(26
)
Interest expense
516

 
339

Other, net
(117
)
 
(171
)
Total other expense
334

 
142

(Loss) income before income taxes
(742
)
 
2,510

Income tax expense
1,943

 
1,503

Net (loss) income
(2,685
)
 
1,007

Other comprehensive income (loss), net of tax:
 
 
 

Unrealized (loss) income on foreign currency hedging
(273
)
 
1,530

Foreign currency translation adjustment
873

 
(674
)
Total other comprehensive income
600

 
856

Comprehensive (loss) income
$
(2,085
)
 
$
1,863

 
 
 
 
Net (loss) income per share:
 

 
 

Basic
$
(0.08
)
 
$
0.03

Diluted
$
(0.08
)
 
$
0.03

Weighted-average common shares outstanding:
 
 
 

Basic
34,621,000

 
34,404,000

Diluted
34,621,000

 
34,788,000

Accumulated Other Comprehensive Loss (Tables)
Components of accumulated other comprehensive income
Accumulated balances of the components within accumulated other comprehensive loss are as follows:
 
3/31/2015
 
3/31/2014
 
12/31/2013
Cumulative foreign currency translation adjustment
$
(20,159
)
 
$
(1,284
)
 
$
(2,157
)
Unrealized loss on foreign currency hedging, net of tax
(309
)
 
(759
)
 
(486
)
Accumulated other comprehensive loss
$
(20,468
)
 
$
(2,043
)
 
$
(2,643
)
Business Segments, Concentration of Business, and Credit Risk and Significant Customers (Tables)
Schedule of business segments information 
Business segment information is summarized as follows:
 
Year ended
 
Quarter ended (transition period)
 
Years ended
 
3/31/2015
 
3/31/2014
 
12/31/2013
 
12/31/2012
Net sales to external customers:
 
 
 
 
 
 
 
UGG wholesale
$
903,926

 
$
83,271

 
$
818,377

 
$
819,256

Teva wholesale
116,931

 
45,283

 
109,334

 
108,591

Sanuk wholesale
102,690

 
28,793

 
94,420

 
89,804

Other brands wholesale
76,152

 
18,662

 
38,276

 
20,194

E-Commerce
233,070

 
38,584

 
169,534

 
130,592

Retail stores
384,288

 
80,123

 
326,677

 
245,961

 
$
1,817,057

 
$
294,716

 
$
1,556,618

 
$
1,414,398

Income (loss) from operations:
 
 
 
 
 
 
 
UGG wholesale
$
269,489

 
$
13,595

 
$
224,738

 
$
206,039

Teva wholesale
13,320

 
6,425

 
9,166

 
9,228

Sanuk wholesale
21,914

 
7,530

 
20,591

 
14,398

Other brands wholesale
(9,838
)
 
(758
)
 
(9,807
)
 
(4,523
)
E-Commerce
92,392

 
13,272

 
66,849

 
56,190

Retail stores
57,928

 
7,646

 
65,683

 
63,306

Unallocated overhead
(220,786
)
 
(48,118
)
 
(169,323
)
 
(157,690
)
 
$
224,419

 
$
(408
)
 
$
207,897

 
$
186,948

Depreciation and amortization:
 
 
 
 
 
 
 
UGG wholesale
$
5,029

 
$
137

 
$
641

 
$
622

Teva wholesale
94

 
33

 
641

 
515

Sanuk wholesale
6,969

 
1,769

 
7,761

 
8,838

Other brands wholesale
940

 
250

 
507

 
1,622

E-Commerce
949

 
242

 
744

 
839

Retail stores
20,139

 
4,967

 
21,117

 
12,073

Unallocated overhead
15,030

 
3,140

 
9,959

 
8,911

 
$
49,150

 
$
10,538

 
$
41,370

 
$
33,420

Capital expenditures:
 
 
 
 
 
 
 
UGG wholesale
$
246

 
$
119

 
$
313

 
$
314

Teva wholesale
51

 
—

 
63

 
326

Sanuk wholesale
487

 
2

 
91

 
448

Other brands wholesale
351

 
26

 
477

 
197

E-Commerce
644

 
8

 
676

 
347

Retail stores
18,484

 
3,549

 
34,993

 
34,004

Unallocated overhead
71,590

 
13,916

 
43,217

 
25,966

 
$
91,853

 
$
17,620

 
$
79,830

 
$
61,602

Total assets from reportable segments:
 
 
 
 
 
 
 
UGG wholesale
$
194,720

 
$
153,341

 
$
314,122

 
$
377,997

Teva wholesale
77,423

 
81,766

 
54,868

 
59,641

Sanuk wholesale
224,974

 
214,627

 
208,669

 
209,861

Other brands wholesale
53,634

 
41,281

 
34,315

 
29,446

E-Commerce
4,485

 
3,129

 
7,331

 
5,058

Retail stores
142,938

 
160,535

 
182,491

 
134,804

 
$
698,174

 
$
654,679

 
$
801,796

 
$
816,807

Schedule of reconciliations of total assets from reportable segments to the condensed consolidated balance sheets 
Reconciliations of total assets from reportable segments to the consolidated balance sheets are as follows:
 
3/31/2015
 
3/31/2014
 
12/31/2013
Total assets from reportable segments
$
698,174

 
$
654,679

 
$
801,796

Unallocated cash and cash equivalents
225,143

 
245,088

 
237,125

Unallocated deferred tax assets
29,083

 
38,933

 
35,632

Other unallocated corporate assets
217,533

 
125,504

 
185,176

Consolidated total assets
$
1,169,933

 
$
1,064,204

 
$
1,259,729

Schedule of long-lived assets, which consist of property and equipment, by major country 
Long-lived assets, which consist of property and equipment, in the US and all other countries combined were as follows:
 
3/31/2015
 
3/31/2014
 
12/31/2013
US
$
196,513

 
$
148,178

 
$
136,726

All other countries*
35,804

 
36,392

 
37,340

Total
$
232,317

 
$
184,570

 
$
174,066


* No other country's long-lived assets comprised more than 10% of total long-lived assets as of March 31, 2015, March 31, 2014 and December 31, 2013.

Schedule of the Company's cash and cash equivalents 
The Company's cash and cash equivalents are as follows:
 
3/31/2015
 
3/31/2014
 
12/31/2013
Money market fund accounts
$
127,900

 
$
143,816

 
$
154,105

Cash
97,243

 
101,272

 
83,020

Total cash and cash equivalents
$
225,143

 
$
245,088

 
$
237,125

Quarterly Summary of Information (Tables)
Summary of unaudited quarterly financial data
Summarized unaudited quarterly financial data are as follows:
 
Fiscal year 2015
 
6/30/2014
 
9/30/2014
 
12/31/2014
 
3/31/2015
Net sales
$
211,469

 
$
480,273

 
$
784,678

 
$
340,637

Gross profit
86,772

 
223,873

 
415,139

 
152,324

Net (loss) income
(37,062
)
 
40,730

 
156,706

 
1,406

Net (loss) income per share:
Basic
$
(1.07
)
 
$
1.18

 
$
4.54

 
$
0.04

Diluted
$
(1.07
)
 
$
1.17

 
$
4.50

 
$
0.04

 
Fiscal year 2013
 
3/31/2013
 
6/30/2013
 
9/30/2013
 
12/31/2013
Net sales
$
263,760

 
$
170,085

 
$
386,725

 
$
736,048

Gross profit
123,559

 
69,832

 
166,892

 
376,200

Net income (loss)
1,007

 
(29,275
)
 
33,060

 
140,897

Net income (loss) per share:
Basic
$
0.03

 
$
(0.85
)
 
$
0.96

 
$
4.08

Diluted
$
0.03

 
$
(0.85
)
 
$
0.95

 
$
4.04

The Company and Summary of Significant Accounting Policies - Joint Venture (Details) (USD $)
In Thousands, unless otherwise specified
0 Months Ended
Apr. 2, 2012
Ownership interest acquired
 
Ownership interest acquired in joint venture (as a percent)
49.00% 
Stella International Holdings Limited
 
Ownership interest acquired
 
Ownership interest in joint venture held by company (as a percent)
51.00% 
Purchase price of ownership interest acquired
$ 20,000 
Reduction in additional paid in capital
$ 14,037 
The Company and Summary of Significant Accounting Policies - Long-Lived Assets (Details) (USD $)
12 Months Ended
Mar. 31, 2015
Depreciation and amortization
 
Long-lived assets valuation, period of cash flows used in numerator
12 months 
Tangibles, Non-consumable Equipment
 
Depreciation and amortization
 
Property and equipment, minimum value capitalized
$ 3,000 
Computer Software and Computer Related Consulting Costs
 
Depreciation and amortization
 
Property and equipment, minimum value capitalized
3,000 
Portable Electronic Devices
 
Depreciation and amortization
 
Property and equipment, minimum value capitalized
$ 1,500 
Building
 
Depreciation and amortization
 
Estimated useful lives, low end of the range (in years)
39 years 
Minimum
 
Depreciation and amortization
 
Estimated useful lives, low end of the range (in years)
1 year 
Minimum |
Machinery and equipment
 
Depreciation and amortization
 
Estimated useful lives, low end of the range (in years)
2 years 
Minimum |
Furniture and fixtures
 
Depreciation and amortization
 
Estimated useful lives, low end of the range (in years)
3 years 
Minimum |
Leasehold improvements
 
Depreciation and amortization
 
Estimated useful lives, low end of the range (in years)
1 year 
Maximum |
Machinery and equipment
 
Depreciation and amortization
 
Estimated useful lives, low end of the range (in years)
10 years 
Maximum |
Furniture and fixtures
 
Depreciation and amortization
 
Estimated useful lives, low end of the range (in years)
7 years 
Maximum |
Leasehold improvements
 
Depreciation and amortization
 
Estimated useful lives, low end of the range (in years)
15 years 
The Company and Summary of Significant Accounting Policies - Fair Value of Financial Liabilities and Assets Measured on a Recurring Basis (Details) (Recurring basis, USD $)
In Thousands, unless otherwise specified
Mar. 31, 2015
Mar. 31, 2014
Dec. 31, 2013
Assets (Liabilities) at fair value
 
 
 
Nonqualified deferred compensation asset
$ 5,581 
$ 4,534 
$ 4,410 
Nonqualified deferred compensation liability
(5,581)
(4,534)
(4,410)
Designated derivatives liability
(487)
(832)
(550)
Contingent consideration for acquisition of business
(26,000)
(30,000)
(48,000)
Level 1
 
 
 
Assets (Liabilities) at fair value
 
 
 
Nonqualified deferred compensation asset
5,581 
4,534 
4,410 
Nonqualified deferred compensation liability
(5,581)
(4,534)
(4,410)
Level 2
 
 
 
Assets (Liabilities) at fair value
 
 
 
Designated derivatives liability
(487)
(832)
(550)
Level 3
 
 
 
Assets (Liabilities) at fair value
 
 
 
Contingent consideration for acquisition of business
$ (26,000)
$ (30,000)
$ (48,000)
The Company and Summary of Significant Accounting Policies - Additional Information (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 12 Months Ended 12 Months Ended 3 Months Ended 12 Months Ended 12 Months Ended
Mar. 31, 2014
Mar. 31, 2013
Mar. 31, 2015
Dec. 31, 2013
Dec. 31, 2012
Sep. 30, 2012
Mar. 31, 2015
Sanuk
Mar. 31, 2015
Sanuk
Maximum
Mar. 31, 2015
Hoka
Mar. 31, 2014
Contingent Consideration Arrangement
Dec. 31, 2013
Contingent Consideration Arrangement
Mar. 31, 2015
Contingent Consideration Arrangement
Mar. 31, 2015
Contingent Consideration Arrangement
Sanuk
Mar. 31, 2015
Other Current Liabilities
Mar. 31, 2015
Other Noncurrent Liabilities
Dec. 31, 2014
Other Noncurrent Liabilities
Mar. 31, 2014
Other Noncurrent Liabilities
Nonqualified Deferred Compensation
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Nonqualified deferred compensation liability
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 540 
$ 5,041 
$ 4,410 
$ 4,534 
Contingent consideration
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Compound annual growth rate (CAGR) (as a percent)
 
 
 
 
 
 
14.60% 
 
 
 
 
 
 
 
 
 
 
Gross profit
 
 
 
 
 
 
 
64,000 
 
 
 
 
 
 
 
 
 
Discount rate (as percent)
 
 
 
 
 
 
7.00% 
 
 
 
 
 
 
 
 
 
 
Percentage point change to compound annual growth rate
 
 
 
 
 
 
5.00% 
 
 
 
 
 
 
 
 
 
 
Effect of a five-percentage-point change to total liability
 
 
 
 
 
 
2,000 
 
 
 
 
 
 
 
 
 
 
Total maximum payout
 
 
 
 
 
2,000 
 
 
2,000 
 
 
 
 
 
 
 
 
Approximate amount paid
 
 
500 
 
 
500 
 
 
 
 
 
 
 
 
 
 
 
Contingent consideration for acquisition of business
 
 
 
 
 
 
 
 
1,500 
 
 
 
24,200 
 
 
 
 
Reconciliation of beginning and ending amounts related to the fair value for contingent consideration for acquisition of business, categorized as Level 3
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Balance at the beginning of the period
 
 
30,000 
 
 
 
 
 
 
48,000 
71,500 
26,000 
 
 
 
 
 
Payments
 
 
(500)
 
 
 
 
 
 
(19,000)
(25,400)
 
 
 
 
 
 
Change in fair value
 
 
(3,500)
 
 
 
 
 
 
1,000 
1,900 
 
 
 
 
 
 
Balance at the end of the period
30,000 
 
 
 
 
 
 
 
 
 
48,000 
26,000 
 
 
 
 
 
Research and Development Costs
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Research and development costs incurred
4,486 
 
20,872 
19,257 
15,617 
 
 
 
 
 
 
 
 
 
 
 
 
Advertising, Marketing, and Promotion Costs
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Advertising, marketing, and promotion expenses
21,158 
 
111,162 
86,510 
78,528 
 
 
 
 
 
 
 
 
 
 
 
 
Prepaid advertising, marketing, and promotion expenses
$ 209 
 
$ 1,899 
$ 212 
 
 
 
 
 
 
 
 
 
 
 
 
 
Income Taxes
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Minimum percentage used for determination of recognition of effect of income tax position if position more likely than not of being sustained
 
 
50.00% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Weighted-average common shares outstanding:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Basic (in shares)
34,621 
34,404 
34,433 
34,473 
36,879 
 
 
 
 
 
 
 
 
 
 
 
 
Dilutive effect of stock based award (in shares)
0 
 
300 
356 
455 
 
 
 
 
 
 
 
 
 
 
 
 
Diluted (in shares)
34,621 
34,788 
34,733 
34,829 
37,334 
 
 
 
 
 
 
 
 
 
 
 
 
The Company and Summary of Significant Accounting Policies - Options Excluded from Computation of Earnings Per Share (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended 3 Months Ended 12 Months Ended 3 Months Ended 12 Months Ended 3 Months Ended 12 Months Ended 3 Months Ended 12 Months Ended
Mar. 31, 2015
segment
Mar. 31, 2014
Dec. 31, 2013
Mar. 31, 2014
Nonvested stock units issued (NSUs)
Mar. 31, 2013
Nonvested stock units issued (NSUs)
Mar. 31, 2015
Nonvested stock units issued (NSUs)
Dec. 31, 2012
Nonvested stock units issued (NSUs)
Mar. 31, 2014
Restricted Stock Units (RSUs)
Mar. 31, 2013
Restricted Stock Units (RSUs)
Mar. 31, 2015
Restricted Stock Units (RSUs)
Dec. 31, 2012
Restricted Stock Units (RSUs)
Mar. 31, 2014
Restricted Stock Awards (RSAs)
Mar. 31, 2013
Restricted Stock Awards (RSAs)
Mar. 31, 2015
Restricted Stock Awards (RSAs)
Dec. 31, 2012
Restricted Stock Awards (RSAs)
Mar. 31, 2014
Stock Appreciation Rights (SARs)
Mar. 31, 2013
Stock Appreciation Rights (SARs)
Mar. 31, 2015
Stock Appreciation Rights (SARs)
Dec. 31, 2012
Stock Appreciation Rights (SARs)
Options excluded in the computation of diluted income per share
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Options excluded in the computation of diluted income per share (in shares)
 
 
 
331 
0 
0 
200 
729 
795 
624 
671 
6 
0 
0 
0 
730 
525 
525 
525 
Derivative Instruments and Hedging Activities
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Maximum maturity period of foreign currency forward or option contracts (in months)
15 months 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Business Segment Reporting
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Number of reportable business segments
6 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash Equivalents
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Money market funds
$ 127,900 
$ 143,816 
$ 154,105 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
The Company and Summary of Significant Accounting Policies - Retirement Plans (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 12 Months Ended
Mar. 31, 2014
Mar. 31, 2015
Dec. 31, 2013
Dec. 31, 2012
Organization, Consolidation and Presentation of Financial Statements [Abstract]
 
 
 
 
Percentage match of employee contribution
 
50.00% 
 
 
Maximum percentage match of employee contribution as a percentage of eligible compensation
 
6.00% 
 
 
Matching contributions by employer
$ 601 
$ 1,726 
$ 1,386 
$ 1,066 
Property and Equipment (Details) (USD $)
In Thousands, unless otherwise specified
Mar. 31, 2015
Mar. 31, 2014
Dec. 31, 2013
Property and equipment
 
 
 
Gross property and equipment
$ 361,319 
$ 287,660 
$ 273,539 
Less accumulated depreciation and amortization
129,002 
103,090 
99,473 
Net property and equipment
232,317 
184,570 
174,066 
Land
 
 
 
Property and equipment
 
 
 
Gross property and equipment
25,543 
25,531 
19,954 
Building
 
 
 
Property and equipment
 
 
 
Gross property and equipment
38,841 
36,387 
0 
Machinery and equipment
 
 
 
Property and equipment
 
 
 
Gross property and equipment
158,136 
98,035 
84,941 
Furniture and fixtures
 
 
 
Property and equipment
 
 
 
Gross property and equipment
36,751 
31,085 
25,961 
Leasehold improvements
 
 
 
Property and equipment
 
 
 
Gross property and equipment
$ 102,048 
$ 96,622 
$ 142,683 
Goodwill and Other Intangible Assets (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 12 Months Ended
Mar. 31, 2014
Mar. 31, 2015
Dec. 31, 2013
Goodwill and Intangible Assets Disclosure [Abstract]
 
 
 
Weighted-Average Amortization Period (in years)
14 years 
13 years 
14 years 
Gross Carrying Amount
$ 101,982 
$ 109,604 
$ 101,963 
Accumulated Amortization
26,026 
37,316 
24,140 
Net Carrying Amount
75,956 
72,288 
77,823 
Intangibles not subject to amortization
 
 
 
Goodwill
127,934 
127,934 
128,725 
Trademarks
15,455 
15,455 
15,455 
Total goodwill and other intangible assets
219,345 
215,677 
222,003 
Changes in goodwill
 
 
 
Goodwill, gross, balance at the beginning of the period
144,556 
143,765 
144,556 
Additions to prior acquisitions, gross
(791)
0 
0 
Goodwill, gross, balance at the end of the period
143,765 
143,765 
144,556 
Accumulated impairment, balance at the beginning of the period
(15,831)
(15,831)
(15,831)
Accumulated impairment, balance at the end of the period
(15,831)
(15,831)
(15,831)
Goodwill, net, balance at the beginning of the period
128,725 
127,934 
128,725 
Additions to prior acquisitions, net
(791)
 
 
Goodwill, net, balance at the end of the period
$ 127,934 
$ 127,934 
$ 128,725 
Goodwill and Other Intangible Assets - Goodwill (Details) (USD $)
In Thousands, unless otherwise specified
1 Months Ended 3 Months Ended 12 Months Ended
Sep. 30, 2014
Mar. 31, 2014
Dec. 31, 2013
Dec. 31, 2012
Mar. 31, 2015
Goodwill
 
 
 
 
 
Total goodwill
 
$ 127,934 
$ 128,725 
$ 128,725 
$ 127,934 
Amortization of Intangible Assets
11,291 
1,886 
7,975 
9,312 
 
Indefinite-lived intangible assets
 
 
 
 
8,044 
Trademarks
 
15,455 
15,455 
 
15,455 
Expected amortization expense on existing intangible assets
 
 
 
 
 
2016
 
 
 
 
9,358 
2017
 
 
 
 
8,361 
2018
 
 
 
 
6,278 
2019
 
 
 
 
5,621 
2020
 
 
 
 
3,813 
Thereafter
 
 
 
 
30,813 
Total
 
 
 
 
64,244 
UGG brand
 
 
 
 
 
Goodwill
 
 
 
 
 
Total goodwill
 
6,101 
6,101 
 
6,101 
Sanuk brand
 
 
 
 
 
Goodwill
 
 
 
 
 
Total goodwill
 
113,944 
113,944 
 
113,944 
Other brands
 
 
 
 
 
Goodwill
 
 
 
 
 
Total goodwill
 
$ 7,889 
$ 8,680 
 
$ 7,889 
Income Taxes - Income Tax Expense (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 12 Months Ended
Mar. 31, 2014
Mar. 31, 2013
Mar. 31, 2015
Dec. 31, 2013
Dec. 31, 2012
Current income taxes
 
 
 
 
 
Federal
$ (572)
 
$ 35,459 
$ 51,058 
$ 50,911 
State
(4)
 
6,861 
6,252 
6,482 
Foreign
5,255 
 
7,069 
6,650 
3,368 
Total
4,679 
 
49,389 
63,960 
60,761 
Deferred income taxes
 
 
 
 
 
Federal
1,669 
 
8,234 
(2,580)
(6,083)
State
(1)
 
624 
(209)
414 
Foreign
(4,404)
 
1,112 
(1,303)
12 
Total
(2,736)
 
9,970 
(4,092)
(5,657)
Income taxes
 
 
 
 
 
Income tax expense
1,943 
1,503 
59,359 
59,868 
55,104 
Foreign income before taxes
(3,631)
 
95,850 
60,851 
51,409 
Actual income taxes differed from that obtained by applying the statutory federal income tax rate to income before income taxes
 
 
 
 
 
Computed expected income taxes
(260)
 
77,399 
71,945 
64,282 
State income taxes, net of federal income tax benefit
90 
 
3,564 
4,435 
3,562 
Foreign rate differential
1,904 
 
(25,535)
(16,399)
(12,908)
Unrecognized tax benefits
0 
 
3,566 
0 
0 
Other
209 
 
365 
(113)
168 
Income tax expense
1,943 
1,503 
59,359 
59,868 
55,104 
Deferred tax assets (liabilities), current:
 
 
 
 
 
Uniform capitalization adjustment to inventory
4,114 
 
4,040 
5,492 
 
Bad debt and other reserves
9,901 
 
8,984 
10,655 
 
State taxes
(1,739)
 
482 
508 
 
Prepaid expenses
(2,217)
 
(3,546)
(2,193)
 
Accrued bonus
2,093 
 
4,120 
5,071 
 
Foreign currency hedge
305 
 
434 
348 
 
Net operating loss carry forwards
9,414 
 
0 
0 
 
Other
0 
 
(448)
0 
 
Total deferred tax assets, current
21,871 
 
14,066 
19,881 
 
Deferred tax assets (liabilities), noncurrent:
 
 
 
 
 
Amortization and impairment of intangible assets
5,267 
 
1,004 
4,603 
 
Depreciation of property and equipment
(4,833)
 
(6,148)
(6,034)
 
Share-based compensation
10,638 
 
12,044 
11,226 
 
Foreign currency translation
382 
 
720 
667 
 
Deferred rent
4,290 
 
4,885 
4,028 
 
Acquisition costs
756 
 
764 
755 
 
Other
128 
 
1,327 
0 
 
Net operating loss carry forwards
434 
 
421 
506 
 
Total deferred tax assets, noncurrent
17,062 
 
15,017 
15,751 
 
Unallocated deferred tax assets
$ 38,933 
 
$ 29,083 
$ 35,632 
 
Income Taxes - Unrecognized Tax Benefit (Details) (USD $)
3 Months Ended 12 Months Ended
Mar. 31, 2014
Mar. 31, 2015
Dec. 31, 2013
Dec. 31, 2012
Income Tax Disclosure [Abstract]
 
 
 
 
Expected future taxable income to fully realize the deferred tax assets
 
$ 76,000,000 
 
 
Goodwill
800,000 
 
 
 
Change in net deferred tax assets attributable to other comprehensive income
200,000 
100,000 
 
 
Domestic taxable income
0 
91,017,000 
151,204,000 
141,660,000 
Unremitted earnings of non-US subsidiaries
 
362,000,000 
 
 
Income tax on the repatriation of all foreign earnings
 
118,000,000 
 
 
Non-US Subsidiary Cash and Cash Equivalents
 
132,000,000 
 
 
Percentage of pre-tax earnings from a country which does not impose a corporate income tax
 
25.00% 
 
 
Minimum percentage used to measure tax benefit of uncertain tax position
 
50.00% 
 
 
Unrecognized tax benefits that would impact effective tax rate
 
3,566,000 
 
 
Reconciliation of the beginning and ending amounts of total unrecognized tax benefits
 
 
 
 
Balance at the beginning of the period
0 
0 
0 
 
Gross change related to current and prior years' tax positions
0 
 
0 
 
Gross increase related to current year tax positions
 
1,293,000 
 
 
Gross increase related to prior year tax positions
 
3,374,000 
 
 
Balance at the end of the period
0 
4,667,000 
0 
0 
Tax benefits, to be settled within 12 months
 
300,000 
 
 
Accrued interest on income tax contingencies
$ 349,000 
$ 1,246,000 
$ 360,000 
 
Notes Payable and Long-Term Debt (Details)
1 Months Ended 12 Months Ended 12 Months Ended 12 Months Ended 1 Months Ended 1 Months Ended 12 Months Ended
Mar. 31, 2015
USD ($)
Mar. 31, 2014
USD ($)
Dec. 31, 2013
USD ($)
Aug. 31, 2012
USD ($)
Aug. 31, 2012
Credit Agreement
USD ($)
Mar. 31, 2015
Credit Agreement
Nov. 30, 2014
Credit Agreement
USD ($)
Mar. 31, 2015
Credit Agreement
Minimum
Mar. 31, 2015
Credit Agreement
Maximum
USD ($)
Mar. 31, 2015
Credit Agreement
LIBOR based interest rates
Mar. 31, 2015
Credit Agreement
LIBOR based interest rates
First 30 days
Mar. 31, 2015
Credit Agreement
LIBOR based interest rates
Thereafter
Mar. 31, 2015
Credit Agreement
LIBOR based interest rates
Thereafter
Minimum
Mar. 31, 2015
Credit Agreement
LIBOR based interest rates
Thereafter
Maximum
Mar. 31, 2015
Credit Agreement
Alternate Base Rate based interest rates
First 30 days
Mar. 31, 2015
Credit Agreement
Alternate Base Rate based interest rates
Thereafter
Aug. 31, 2013
China Credit Agreement
Jun. 30, 2014
China Credit Agreement
Maximum
USD ($)
Jun. 30, 2014
China Credit Agreement
Maximum
CNY
Mar. 31, 2014
China Credit Agreement
Maximum
USD ($)
Mar. 31, 2014
China Credit Agreement
Maximum
CNY
Dec. 31, 2013
China Credit Agreement
Maximum
USD ($)
Dec. 31, 2013
China Credit Agreement
Maximum
CNY
Sep. 30, 2013
China Credit Agreement
Maximum
USD ($)
Sep. 30, 2013
China Credit Agreement
Maximum
CNY
Mar. 31, 2015
Amended China Credit Agreement
USD ($)
Oct. 30, 2014
Amended China Credit Agreement
Minimum
Oct. 30, 2014
Amended China Credit Agreement
Maximum
Mar. 31, 2015
Line of Credit
Revolving Credit Facility
Credit Agreement
USD ($)
Mar. 31, 2015
Line of Credit
Revolving Credit Facility
Amended China Credit Agreement
Jul. 31, 2014
Mortgages
USD ($)
Mar. 31, 2015
Mortgages
USD ($)
Notes Payable and Long-Term Debt
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Term of agreement (in years)
 
 
 
 
5 years 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Current borrowing capacity
 
 
 
 
$ 400,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 60,000,000 
 
 
 
 
 
 
 
 
 
Debt Instrument, Term
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
12 months 
18 months 
 
 
 
15 years 
Maximum available for the issuance of letters of credit
 
 
 
 
75,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Maximum available for swing loans
 
 
 
 
5,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Additional available credit
 
 
 
 
200,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Maximum borrowing capacity with contingent increase
 
 
 
600,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Capacity available for currency borrowings
 
 
 
150,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Period of variable interest rate basis (in days)
 
 
 
 
 
30 days 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Adjusted LIBOR rate at period end (as a percent)
 
 
 
 
 
 
 
 
 
0.18% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Spread on variable interest rate (as a percent)
 
 
 
 
 
1.00% 
 
 
 
 
1.25% 
 
1.25% 
2.00% 
0.25% 
0.25% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Variable interest rate basis
 
 
 
 
 
 
 
 
 
 
 
LIBOR 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Fees on the daily unused amount (as a percent)
 
 
 
 
 
0.175% 
 
0.175% 
0.30% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Additional Financial Covenants Required
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Asset coverage ratio, numerator, to be maintained under Credit Agreement covenants
 
 
 
 
 
 
 
3.25 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Ratio of consolidated EBITDA plus annual rental expense to annual interest expense plus annual rental expense, numerator, to be maintained under Credit Agreement covenants
 
 
 
 
 
 
 
2.25 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Debt Instrument, Covenant Capital Expenditures Allowed
 
 
 
 
 
 
 
 
110,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total adjusted leverage ratio, numerator, to allow for maximum limit on acquisitions under terms of the Credit Agreement covenants
 
 
 
 
 
2.75 
 
 
2.75 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Additional unsecured debt allowed under Credit Agreement covenants
 
 
 
 
 
 
 
 
200,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Outstanding letters of credit
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
100,000 
 
 
 
Amount available under the Credit Agreement
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
399,900,000 
 
 
 
Deferred financing costs
 
 
 
 
1,800,000 
 
800,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Debt Instrument Covenant Borrowings Allowed in Third and Fourth Quarters of Fiscal Year
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
10,000,000 
60,000,000 
10,000,000 
60,000,000 
 
 
 
 
 
 
 
Debt Instrument Covenant Borrowings Allowed in First and Second Quarters of Fiscal Year
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
3,300,000 
20,000,000 
3,300,000 
20,000,000 
 
 
 
 
 
 
 
 
 
 
 
Debt Instrument Covenant Percentage of Facility Amount in United States Dollars Guaranteed
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
110.00% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Outstanding borrowings
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
4,900,000 
 
 
 
 
 
 
Debt Instrument, Interest Rate, Effective Percentage
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
5.35% 
4.928% 
 
Debt Instrument, Face Amount
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
33,900,000 
 
Long-term Debt, Gross
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
33,600,000 
Short-term borrowings
5,383,000 
6,702,000 
9,728,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
500,000 
Mortgage payable
33,154,000 
0 
0 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
33,100,000 
Debt Instrument, Amortization Period
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
30 years 
 
Debt Instrument, Term for Minimum Payments
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
5 years 
 
Debt Instrument, Periodic Payment Terms, Balloon Payment to be Paid
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
23,400,000 
 
Debt Instrument, Annual Principal Payment
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 2,700,000 
 
Commitments and Contingencies - Lease Commitments (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 12 Months Ended
Mar. 31, 2014
Mar. 31, 2015
Dec. 31, 2013
Dec. 31, 2012
Future minimum commitments under the lease agreements
 
 
 
 
2016
 
$ 53,664 
 
 
2017
 
55,325 
 
 
2018
 
49,357 
 
 
2019
 
39,293 
 
 
2020
 
32,809 
 
 
Thereafter
 
118,451 
 
 
Total
 
348,899 
 
 
Composition of total rental expense
 
 
 
 
Minimum rentals
14,260 
61,363 
47,871 
37,270 
Contingent rentals
3,099 
14,707 
12,318 
9,366 
Total
$ 17,359 
$ 76,070 
$ 60,189 
$ 46,636 
Minimum
 
 
 
 
Commitments and Contingencies
 
 
 
 
Term of renewal options range (in years)
 
1 year 
 
 
Maximum
 
 
 
 
Commitments and Contingencies
 
 
 
 
Term of renewal options range (in years)
 
15 years 
 
 
Commitments and Contingencies - Purchase Commitments (Details) (USD $)
In Thousands, unless otherwise specified
Mar. 31, 2015
Purchase commitments entered in October 2011
 
Future commitments
 
Advance Deposits
$ 50,000 
Total Minimum Commitment
286,000 
Remaining Deposit
13,783 
Remaining Commitments, Net of Deposit
0 
Purchase commitments entered in October 2012
 
Future commitments
 
Advance Deposits
0 
Total Minimum Commitment
51,240 
Remaining Deposit
0 
Remaining Commitments, Net of Deposit
32,487 
Purchase commitments entered in September 2013
 
Future commitments
 
Advance Deposits
0 
Total Minimum Commitment
47,960 
Remaining Deposit
0 
Remaining Commitments, Net of Deposit
$ 15,434 
Commitments and Contingencies - Additional Information (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 12 Months Ended
Mar. 31, 2014
Mar. 31, 2015
Dec. 31, 2013
Dec. 31, 2012
Sep. 30, 2012
Commitments and Contingencies
 
 
 
 
 
Future commitments under purchase orders and other agreements in next year
 
$ 664,429 
 
 
 
Maximum indemnity period of claims for intellectual property (in years)
 
5 years 
 
 
 
Business Acquisition Purchase Price, Additional Participation Payment Year Three, Terms
 
60 days 
 
 
 
Contingent consideration
0 
0 
0 
1,128 
 
Maximum contingent consideration payments
 
 
 
 
2,000 
Approximate amount paid
 
500 
 
 
500 
Long-term Purchase Commitment, Amount
 
8,000 
 
 
 
Sanuk
 
 
 
 
 
Commitments and Contingencies
 
 
 
 
 
Contingent consideration
28,000 
24,200 
46,200 
 
 
Contingent consideration included within other accrued expenses
0 
24,200 
18,600 
 
 
Contingent consideration included within long-term liabilities
28,000 
0 
27,600 
 
 
Sanuk |
Gross profit performance criteria
 
 
 
 
 
Commitments and Contingencies
 
 
 
 
 
Contingent consideration performance percentage applied to gross profit in 2015
 
40.00% 
 
 
 
Hoka
 
 
 
 
 
Commitments and Contingencies
 
 
 
 
 
Contingent consideration
1,800 
1,500 
1,800 
 
 
Maximum contingent consideration payments
 
2,000 
 
 
 
Purchase commitment
 
 
 
 
 
Commitments and Contingencies
 
 
 
 
 
Advance deposits
11,000 
14,000 
67,000 
 
 
Outstanding purchase orders with manufacturers
 
 
 
 
 
Commitments and Contingencies
 
 
 
 
 
Outstanding purchase orders with manufacturers
 
$ 664,659 
 
 
 
Stockholders' Equity (Details) (USD $)
0 Months Ended 1 Months Ended 3 Months Ended 12 Months Ended 1 Months Ended 12 Months Ended 1 Months Ended 3 Months Ended 12 Months Ended 3 Months Ended 12 Months Ended 3 Months Ended 12 Months Ended 3 Months Ended 12 Months Ended 3 Months Ended 12 Months Ended 3 Months Ended 12 Months Ended 3 Months Ended 12 Months Ended 3 Months Ended 12 Months Ended 1 Months Ended 1 Months Ended 12 Months Ended 1 Months Ended 12 Months Ended
Feb. 28, 2015
Jan. 31, 2015
Jun. 30, 2012
Mar. 31, 2014
Mar. 31, 2015
Dec. 31, 2013
Dec. 31, 2012
Sep. 30, 2014
Maximum
Mar. 31, 2015
Maximum
Sep. 30, 2014
Minimum
Mar. 31, 2014
Nonvested stock units issued (NSUs)
Mar. 31, 2015
Nonvested stock units issued (NSUs)
Dec. 31, 2013
Nonvested stock units issued (NSUs)
Dec. 31, 2012
Nonvested stock units issued (NSUs)
Mar. 31, 2014
Restricted Stock Units (RSUs)
Mar. 31, 2015
Restricted Stock Units (RSUs)
Dec. 31, 2013
Restricted Stock Units (RSUs)
Dec. 31, 2012
Restricted Stock Units (RSUs)
Mar. 31, 2014
Directors' shares
Mar. 31, 2015
Directors' shares
Dec. 31, 2013
Directors' shares
Dec. 31, 2012
Directors' shares
Mar. 31, 2014
Stock Appreciation Rights (SARs)
Mar. 31, 2015
Stock Appreciation Rights (SARs)
Dec. 31, 2013
Stock Appreciation Rights (SARs)
Dec. 31, 2012
Stock Appreciation Rights (SARs)
Mar. 31, 2014
2006 Equity Incentive Plan (2006 Plan)
Mar. 31, 2015
2006 Equity Incentive Plan (2006 Plan)
Dec. 31, 2013
2006 Equity Incentive Plan (2006 Plan)
Dec. 31, 2012
2006 Equity Incentive Plan (2006 Plan)
May 31, 2006
2006 Equity Incentive Plan (2006 Plan)
Mar. 31, 2014
2006 Equity Incentive Plan (2006 Plan)
Nonvested stock units issued (NSUs)
Mar. 31, 2015
2006 Equity Incentive Plan (2006 Plan)
Nonvested stock units issued (NSUs)
Dec. 31, 2013
2006 Equity Incentive Plan (2006 Plan)
Nonvested stock units issued (NSUs)
Dec. 31, 2012
2006 Equity Incentive Plan (2006 Plan)
Nonvested stock units issued (NSUs)
Mar. 31, 2015
2006 Equity Incentive Plan (2006 Plan)
Nonvested stock units issued (NSUs)
Award granted in 2011
Mar. 31, 2014
2006 Equity Incentive Plan (2006 Plan)
Restricted Stock Units (RSUs)
Mar. 31, 2015
2006 Equity Incentive Plan (2006 Plan)
Restricted Stock Units (RSUs)
Dec. 31, 2013
2006 Equity Incentive Plan (2006 Plan)
Restricted Stock Units (RSUs)
Dec. 31, 2012
2006 Equity Incentive Plan (2006 Plan)
Restricted Stock Units (RSUs)
Mar. 31, 2014
2006 Equity Incentive Plan (2006 Plan)
Stock Appreciation Rights (SARs)
Mar. 31, 2015
2006 Equity Incentive Plan (2006 Plan)
Stock Appreciation Rights (SARs)
Dec. 31, 2013
2006 Equity Incentive Plan (2006 Plan)
Stock Appreciation Rights (SARs)
Dec. 31, 2012
2006 Equity Incentive Plan (2006 Plan)
Stock Appreciation Rights (SARs)
Dec. 31, 2011
2006 Equity Incentive Plan (2006 Plan)
Stock Appreciation Rights (SARs)
Dec. 31, 2013
Long-term incentive awards
group
Mar. 31, 2015
Long-term incentive awards
Mar. 31, 2015
Long-term incentive awards
Award granted in 2012
Mar. 31, 2015
Long-term incentive awards
Award Granted in 2013
May 31, 2012
Long-term incentive awards
Maximum
May 31, 2012
Long-term incentive awards
Minimum
May 31, 2012
Long-term incentive awards
Restricted Stock Units (RSUs)
Dec. 31, 2013
Long-term incentive awards
Restricted Stock Units (RSUs)
Dec. 31, 2012
Long-term incentive awards
Restricted Stock Units (RSUs)
Dec. 31, 2013
Long-term incentive awards
Restricted Stock Units (RSUs)
Maximum
Dec. 31, 2012
Long-term incentive awards
Restricted Stock Units (RSUs)
Maximum
Mar. 31, 2015
Long-term incentive awards
SAR awards and RSU awards
Dec. 31, 2013
Non-revenue Generating Group
Maximum
Dec. 31, 2013
Non-revenue Generating Group
Minimum
Dec. 31, 2013
Revenue Generating Group
Minimum
Dec. 31, 2011
Long-term incentive award (Level III Awards)
Restricted Stock Units (RSUs)
Maximum
Mar. 31, 2015
Portion Vesting On December 2010
Long-term incentive awards
SAR awards and RSU awards
Mar. 31, 2015
Portion Vesting On December 2011
Long-term incentive awards
SAR awards and RSU awards
Mar. 31, 2015
Portion Vesting On December 2015
Long-term incentive awards
SAR awards and RSU awards
Mar. 31, 2015
Portion Vesting On December 2016
Long-term incentive awards
SAR awards and RSU awards
Stockholders' equity
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Common stock reserved for issuance (in shares)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
6,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Maximum number of shares that may be issued through the exercise of incentive stock options
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
4,500,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Awards granted that will vest after the performance goals are achieved (as a percent)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
33.33% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Award vesting period
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
3 years 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Portion of SAR and RSU awards scheduled to vest on December 31, 2010 and December 31, 2011
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
50.00% 
 
 
 
 
 
 
 
 
Portion of SAR and RSU awards scheduled to vest on December 31, 2015 and December 31, 2016
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
50.00% 
 
 
 
 
 
 
 
 
Portion of SAR and RSU awards scheduled to vest on December 31, 2010 and December 31, 2011
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
50.00% 
 
 
 
 
 
 
 
 
Portion of SAR and RSU awards scheduled to vest on December 31, 2015 and December 31, 2016
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
50.00% 
 
 
 
 
 
 
 
 
Number of shares granted
 
 
 
 
 
 
 
 
160,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
0 
196,000 
304,000 
209,000 
 
0 
160,000 
156,000 
352,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
156,000 
352,000 
 
 
 
 
275,000 
 
 
 
 
Number of shares receivable as right under stock-based awards
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue targets to be met for awards to be vested
 
 
 
 
 
 
 
$ 2,447,000,000 
 
$ 2,155,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 2,900,000,000 
$ 2,200,000,000 
 
 
 
 
 
 
$ 2,558,000,000 
$ 2,290,000,000 
 
 
 
 
 
 
Diluted earnings per share targets to be met for awards to be vested (in dollars per share)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 10.50 
$ 7.00 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Grant date fair value of RSUs
 
 
 
 
$ 98.29 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 0.00 
$ 82.34 
$ 57.30 
$ 63.18 
 
$ 0.00 
$ 98.29 
$ 84.52 
$ 56.12 
 
 
 
 
 
 
 
 
 
 
 
 
$ 84.52 
$ 56.12 
 
 
 
 
 
 
 
 
 
 
 
Compensation expense cumulative amount based on maximum number of units subject to performance objectives probable
 
 
 
 
2,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
12,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Number of participant groups
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
EBITDA targets to be met for awards to be vested
 
 
 
 
 
 
 
394,000,000 
 
336,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
415,000,000 
372,000,000 
350,000,000 
 
 
 
 
 
Unrecognized compensation cost
 
 
 
 
6,100,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Maximum stock repurchase amount approved by Board of Directors
 
 
200,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Number of shares repurchased
3,823,000 
 
 
 
377,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Repurchase of common stock, payments
200,000,000 
 
 
 
27,900,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Average stock price of shares repurchased (in dollars per share)
$ 52.31 
 
 
 
$ 74.09 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Remaining stock repurchase amount approved by Board of Directors
 
200,000,000 
 
 
172,100,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Maximum contractual term of SARs with final vesting date of December 31, 2011 (in years)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
10 years 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Maximum contractual term of SARs with final vesting date of December 31, 2016 (in years)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
15 years 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Stock compensation expenses
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Compensation expenses recorded
 
 
 
2,865,000 
13,524,000 
13,136,000 
14,661,000 
 
 
 
1,863,000 
9,295,000 
10,545,000 
11,849,000 
354,000 
1,323,000 
287,000 
231,000 
267,000 
1,060,000 
1,002,000 
1,080,000 
381,000 
1,846,000 
1,302,000 
1,501,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Income tax benefit recognized
 
 
 
(1,082,000)
(5,143,000)
(4,950,000)
(5,573,000)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net compensation expenses
 
 
 
1,783,000 
8,381,000 
8,186,000 
9,088,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Unrecognized Compensation Cost
 
 
 
 
21,589,000 
 
 
 
 
 
 
13,917,000 
 
 
 
6,317,000 
 
 
 
 
 
 
 
1,355,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Weighted-Average Remaining Vesting Period (in years)
 
 
 
 
 
 
 
 
 
 
 
1 year 6 months 
 
 
 
1 year 6 months 
 
 
 
 
 
 
 
10 months 24 days 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Maximum compensation cost excluded from unrecognized compensation cost subject to performance condition not considered probable
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
15,637,000 
10,396,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Nonvested Stock Units and Restricted Stock Units Issued Under the 2006 Plan
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Nonvested at the beginning of the period (in shares)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
340,000 
331,000 
371,000 
677,000 
 
795,000 
729,000 
671,000 
319,000 
730,000 
730,000 
745,000 
760,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Granted (in shares)
 
 
 
 
 
 
 
 
160,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
0 
196,000 
304,000 
209,000 
 
0 
160,000 
156,000 
352,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
156,000 
352,000 
 
 
 
 
275,000 
 
 
 
 
Vested (in shares)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(2,000)
(142,000)
(315,000)
(297,000)
 
0 
0 
0 
0 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Forfeited (in shares)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(7,000)
(30,000)
(20,000)
(18,000)
 
(66,000)
(35,000)
(32,000)
0 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cancelled (in shares)
 
 
 
 
 
 
(200,000)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(15,000)
 
 
 
 
(230,000)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Nonvested at the end of the period (in shares)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
331,000 
340,000 
340,000 
371,000 
 
729,000 
624,000 
795,000 
671,000 
730,000 
715,000 
730,000 
745,000 
760,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Weighted-Average Grant-Date Fair Value
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Nonvested at the beginning of the period (in dollars per share)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 62.23 
$ 62.21 
$ 58.51 
$ 48.14 
 
$ 67.03 
$ 67.01 
$ 62.80 
$ 70.15 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Granted (in dollars per share)
 
 
 
 
$ 98.29 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 0.00 
$ 82.34 
$ 57.30 
$ 63.18 
 
$ 0.00 
$ 98.29 
$ 84.52 
$ 56.12 
 
 
 
 
 
 
 
 
 
 
 
 
$ 84.52 
$ 56.12 
 
 
 
 
 
 
 
 
 
 
 
Vested (in dollars per share)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 58.11 
$ 68.39 
$ 53.19 
$ 35.90 
 
$ 0.00 
$ 0.00 
$ 0.00 
$ 0.00 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Forfeited (in dollars per share)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 64.15 
$ 64.18 
$ 61.08 
$ 63.68 
 
$ 67.23 
$ 78.39 
$ 63.69 
$ 0.00 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cancelled (in dollars per share)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 84.04 
 
$ 62.17 
 
 
$ 82.09 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Nonvested at the end of the period (in dollars per share)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 62.21 
$ 70.11 
$ 62.23 
$ 58.51 
 
$ 67.01 
$ 68.82 
$ 67.03 
$ 62.80 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Stock Appreciation Rights Issued Under the 2006 Plan
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Nonvested at the beginning of the period (in shares)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
340,000 
331,000 
371,000 
677,000 
 
795,000 
729,000 
671,000 
319,000 
730,000 
730,000 
745,000 
760,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Granted (in shares)
 
 
 
0 
 
0 
0 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
0 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Exercised (in shares)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
0 
(15,000)
(15,000)
(15,000)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Forfeited (in shares)
 
 
 
0 
0 
0 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
0 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Nonvested at the end of the period (in shares)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
331,000 
340,000 
340,000 
371,000 
 
729,000 
624,000 
795,000 
671,000 
730,000 
715,000 
730,000 
745,000 
760,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Exercisable at the end of the period (in shares)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
190,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Expected to vest and exercisable (in shares)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
702,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Weighted-Average Exercise Price
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Outstanding at the beginning of the period (in dollars per share)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 26.73 
$ 26.73 
$ 26.73 
$ 26.73 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Granted (in dollars per share)
 
 
 
$ 0.00 
$ 0.00 
$ 0.00 
$ 0.00 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Exercised (in dollars per share)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 0.00 
$ 26.73 
$ 26.73 
$ 26.73 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Forfeited (in dollars per share)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 0.00 
$ 0.00 
$ 0.00 
$ 0.00 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Outstanding at the end of the period (in dollars per share)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 26.73 
$ 26.73 
$ 26.73 
$ 26.73 
$ 26.73 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Exercisable at the end of the period (in dollars per share)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 26.73 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Expected to vest and exercisable (in dollars per share)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 26.73 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Weighted-Average Remaining Contractual Term (in years)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Outstanding at the end of the period (in years)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
6 years 8 months 12 days 
5 years 9 months 18 days 
6 years 11 months 12 days 
7 years 10 months 17 days 
8 years 9 months 18 days 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Exercisable at the end of the period (in years)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2 years 1 month 6 days 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Expected to vest and exercisable (in years)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
5 years 9 months 18 days 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Aggregate Intrinsic Value
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Outstanding at the end of the period (in dollars)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
38,690,000 
32,990,000 
42,143,000 
10,087,000 
37,118,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Exercisable at the end of the period (in dollars)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
8,767,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Expected to vest and exercisable (in dollars)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 32,396,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
80.00% 
20.00% 
80.00% 
20.00% 
Foreign Currency Exchange Contracts and Hedging (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 12 Months Ended 3 Months Ended 12 Months Ended 3 Months Ended 12 Months Ended
Mar. 31, 2014
Foreign currency exchange contracts
Mar. 31, 2015
Foreign currency exchange contracts
counterparty
Dec. 31, 2013
Foreign currency exchange contracts
Mar. 31, 2014
Derivatives designated as cash flow hedges
Mar. 31, 2015
Derivatives designated as cash flow hedges
Dec. 31, 2013
Derivatives designated as cash flow hedges
Mar. 31, 2014
Derivatives designated as cash flow hedges
Foreign currency exchange contracts
Mar. 31, 2015
Derivatives designated as cash flow hedges
Foreign currency exchange contracts
Dec. 31, 2013
Derivatives designated as cash flow hedges
Foreign currency exchange contracts
Apr. 30, 2015
Subsequent Event
Foreign currency exchange contracts
counterparty
Apr. 30, 2015
Not Designated as Hedging Instrument
Subsequent Event
Foreign currency exchange contracts
Apr. 30, 2015
Designated as Hedging Instrument
Subsequent Event
Foreign currency exchange contracts
Foreign currency exchange contracts and hedging
 
 
 
 
 
 
 
 
 
 
 
 
Notional amounts of foreign currency hedging contracts
$ 64,000 
$ 46,000 
$ 77,000 
 
 
 
 
 
 
 
$ 42,000 
$ 31,000 
Number of Counterparties in Derivative Contracts
 
4 
 
 
 
 
 
 
 
6 
 
 
Maximum Remaining Maturity of Foreign Currency Derivatives
 
12 months 
 
 
 
 
 
 
 
 
 
 
Summary of the effect of derivative instruments on the consolidated statements of income
 
 
 
 
 
 
 
 
 
 
 
 
Amount of Gain (Loss) Recognized in OCI on Derivative (Effective Portion)
 
 
 
 
 
 
(47)
1,556 
(779)
 
 
 
Amount of Gain (Loss) Reclassified from Accumulated OCI into Income (Effective Portion)
 
 
 
(283)
1,226 
17 
 
 
 
 
 
 
Gain (Loss) from Amount Excluded from Effectiveness Testing
 
 
 
(31)
(69)
(11)
 
 
 
 
 
 
Amount of Gain Recognized in Income on Derivatives
$ 0 
$ 6,383 
$ 728 
 
 
 
 
 
 
 
 
 
Transition Period (Details) (USD $)
In Thousands, except Per Share data, unless otherwise specified
3 Months Ended 12 Months Ended
Mar. 31, 2015
Dec. 31, 2014
Sep. 30, 2014
Jun. 30, 2014
Mar. 31, 2014
Dec. 31, 2013
Sep. 30, 2013
Jun. 30, 2013
Mar. 31, 2013
Mar. 31, 2015
Dec. 31, 2013
Dec. 31, 2012
Transition Period [Abstract]
 
 
 
 
 
 
 
 
 
 
 
 
Net sales
$ 340,637 
$ 784,678 
$ 480,273 
$ 211,469 
$ 294,716 
$ 736,048 
$ 386,725 
$ 170,085 
$ 263,760 
$ 1,817,057 
$ 1,556,618 
$ 1,414,398 
Cost of sales
 
 
 
 
150,456 
 
 
 
140,201 
938,949 
820,135 
782,244 
Gross profit
152,324 
415,139 
223,873 
86,772 
144,260 
376,200 
166,892 
69,832 
123,559 
878,108 
736,483 
632,154 
Selling, general and administrative (SG&A) expenses
 
 
 
 
144,668 
 
 
 
120,907 
653,689 
528,586 
445,206 
Income (loss) from operations
 
 
 
 
(408)
 
 
 
2,652 
224,419 
207,897 
186,948 
Other expense (income), net:
 
 
 
 
 
 
 
 
 
 
 
 
Interest income
 
 
 
 
(65)
 
 
 
(26)
(207)
(60)
(217)
Interest expense
 
 
 
 
516 
 
 
 
339 
4,220 
3,079 
3,840 
Other, net
 
 
 
 
(117)
 
 
 
(171)
(733)
(679)
(793)
Total other expense, net
 
 
 
 
334 
 
 
 
142 
3,280 
2,340 
2,830 
(Loss) income before income taxes
 
 
 
 
(742)
 
 
 
2,510 
221,139 
205,557 
184,118 
Income tax expense
 
 
 
 
1,943 
 
 
 
1,503 
59,359 
59,868 
55,104 
Net income (loss)
 
 
 
 
(2,685)
 
 
 
1,007 
161,780 
145,689 
129,014 
Other comprehensive income (loss), net of tax:
 
 
 
 
 
 
 
 
 
 
 
 
Unrealized (loss) income on foreign currency hedging
 
 
 
 
(273)
 
 
 
1,530 
450 
(486)
(633)
Foreign currency translation adjustment
 
 
 
 
873 
 
 
 
(674)
(18,875)
(757)
963 
Total other comprehensive (loss) income
 
 
 
 
600 
 
 
 
856 
(18,425)
(1,243)
330 
Comprehensive income (loss)
 
 
 
 
$ (2,085)
 
 
 
$ 1,863 
$ 143,355 
$ 144,446 
$ 129,344 
Net (loss) income per share:
 
 
 
 
 
 
 
 
 
 
 
 
Basic (in dollars per share)
$ 0.04 
$ 4.54 
$ 1.18 
$ (1.07)
$ (0.08)
$ 4.08 
$ 0.96 
$ (0.85)
$ 0.03 
$ 4.70 
$ 4.23 
$ 3.49 
Diluted (in dollars per share)
$ 0.04 
$ 4.50 
$ 1.17 
$ (1.07)
$ (0.08)
$ 4.04 
$ 0.95 
$ (0.85)
$ 0.03 
$ 4.66 
$ 4.18 
$ 3.45 
Weighted-average common shares outstanding:
 
 
 
 
 
 
 
 
 
 
 
 
Basic (in shares)
 
 
 
 
34,621 
 
 
 
34,404 
34,433 
34,473 
36,879 
Diluted (in shares)
 
 
 
 
34,621 
 
 
 
34,788 
34,733 
34,829 
37,334 
Accumulated Other Comprehensive Loss (Details) (USD $)
In Thousands, unless otherwise specified
Mar. 31, 2015
Mar. 31, 2014
Dec. 31, 2013
Accumulated other comprehensive income
 
 
 
Cumulative foreign currency translation adjustment
$ (20,159)
$ (1,284)
$ (2,157)
Unrealized loss on foreign currency hedging, net of tax
(309)
(759)
(486)
Accumulated other comprehensive loss
$ (20,468)
$ (2,043)
$ (2,643)
Business Segments, Concentration of Business, and Credit Risk and Significant Customers - Summary of Business Segment Information (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 12 Months Ended
Mar. 31, 2015
Dec. 31, 2014
Sep. 30, 2014
Jun. 30, 2014
Mar. 31, 2014
Dec. 31, 2013
Sep. 30, 2013
Jun. 30, 2013
Mar. 31, 2013
Mar. 31, 2015
segment
store
Dec. 31, 2013
Dec. 31, 2012
Segment Reporting [Abstract]
 
 
 
 
 
 
 
 
 
 
 
 
Number of reportable segments in which other brands are included
 
 
 
 
 
 
 
 
 
1 
 
 
Number of stores converted to partner retail stores
 
 
 
 
 
 
 
 
 
7 
 
 
Business segment information
 
 
 
 
 
 
 
 
 
 
 
 
Net sales to external customers
$ 340,637 
$ 784,678 
$ 480,273 
$ 211,469 
$ 294,716 
$ 736,048 
$ 386,725 
$ 170,085 
$ 263,760 
$ 1,817,057 
$ 1,556,618 
$ 1,414,398 
Income (loss) from operations
 
 
 
 
(408)
 
 
 
2,652 
224,419 
207,897 
186,948 
Depreciation and amortization
 
 
 
 
10,569 
 
 
 
 
49,293 
41,439 
33,367 
Depreciation, Depletion and Amortization
 
 
 
 
10,538 
 
 
 
 
49,150 
41,370 
33,420 
Capital expenditures
 
 
 
 
17,620 
 
 
 
 
91,853 
79,830 
61,602 
Total assets
1,169,933 
 
 
 
1,064,204 
1,259,729 
 
 
 
1,169,933 
1,259,729 
 
Reportable segments
 
 
 
 
 
 
 
 
 
 
 
 
Business segment information
 
 
 
 
 
 
 
 
 
 
 
 
Total assets
698,174 
 
 
 
654,679 
801,796 
 
 
 
698,174 
801,796 
816,807 
UGG wholesale
 
 
 
 
 
 
 
 
 
 
 
 
Business segment information
 
 
 
 
 
 
 
 
 
 
 
 
Net sales to external customers
 
 
 
 
83,271 
 
 
 
 
903,926 
818,377 
819,256 
Income (loss) from operations
 
 
 
 
13,595 
 
 
 
 
269,489 
224,738 
206,039 
Depreciation and amortization
 
 
 
 
137 
 
 
 
 
5,029 
641 
622 
Capital expenditures
 
 
 
 
119 
 
 
 
 
246 
313 
314 
Total assets
194,720 
 
 
 
153,341 
314,122 
 
 
 
194,720 
314,122 
377,997 
Teva wholesale
 
 
 
 
 
 
 
 
 
 
 
 
Business segment information
 
 
 
 
 
 
 
 
 
 
 
 
Net sales to external customers
 
 
 
 
45,283 
 
 
 
 
116,931 
109,334 
108,591 
Income (loss) from operations
 
 
 
 
6,425 
 
 
 
 
13,320 
9,166 
9,228 
Depreciation and amortization
 
 
 
 
33 
 
 
 
 
94 
641 
515 
Capital expenditures
 
 
 
 
0 
 
 
 
 
51 
63 
326 
Total assets
77,423 
 
 
 
81,766 
54,868 
 
 
 
77,423 
54,868 
59,641 
Sanuk wholesale
 
 
 
 
 
 
 
 
 
 
 
 
Business segment information
 
 
 
 
 
 
 
 
 
 
 
 
Net sales to external customers
 
 
 
 
28,793 
 
 
 
 
102,690 
94,420 
89,804 
Income (loss) from operations
 
 
 
 
7,530 
 
 
 
 
21,914 
20,591 
14,398 
Depreciation and amortization
 
 
 
 
1,769 
 
 
 
 
6,969 
7,761 
8,838 
Capital expenditures
 
 
 
 
2 
 
 
 
 
487 
91 
448 
Total assets
224,974 
 
 
 
214,627 
208,669 
 
 
 
224,974 
208,669 
209,861 
Other brands wholesale
 
 
 
 
 
 
 
 
 
 
 
 
Business segment information
 
 
 
 
 
 
 
 
 
 
 
 
Net sales to external customers
 
 
 
 
18,662 
 
 
 
 
76,152 
38,276 
20,194 
Income (loss) from operations
 
 
 
 
(758)
 
 
 
 
(9,838)
(9,807)
(4,523)
Depreciation and amortization
 
 
 
 
250 
 
 
 
 
940 
507 
1,622 
Capital expenditures
 
 
 
 
26 
 
 
 
 
351 
477 
197 
Total assets
53,634 
 
 
 
41,281 
34,315 
 
 
 
53,634 
34,315 
29,446 
eCommerce
 
 
 
 
 
 
 
 
 
 
 
 
Business segment information
 
 
 
 
 
 
 
 
 
 
 
 
Net sales to external customers
 
 
 
 
38,584 
 
 
 
 
233,070 
169,534 
130,592 
Income (loss) from operations
 
 
 
 
13,272 
 
 
 
 
92,392 
66,849 
56,190 
Depreciation and amortization
 
 
 
 
242 
 
 
 
 
949 
744 
839 
Capital expenditures
 
 
 
 
8 
 
 
 
 
644 
676 
347 
Total assets
4,485 
 
 
 
3,129 
7,331 
 
 
 
4,485 
7,331 
5,058 
Retail stores
 
 
 
 
 
 
 
 
 
 
 
 
Business segment information
 
 
 
 
 
 
 
 
 
 
 
 
Net sales to external customers
 
 
 
 
80,123 
 
 
 
 
384,288 
326,677 
245,961 
Income (loss) from operations
 
 
 
 
7,646 
 
 
 
 
57,928 
65,683 
63,306 
Depreciation and amortization
 
 
 
 
4,967 
 
 
 
 
20,139 
21,117 
12,073 
Capital expenditures
 
 
 
 
3,549 
 
 
 
 
18,484 
34,993 
34,004 
Total assets
142,938 
 
 
 
160,535 
182,491 
 
 
 
142,938 
182,491 
134,804 
Unallocated to Segments
 
 
 
 
 
 
 
 
 
 
 
 
Business segment information
 
 
 
 
 
 
 
 
 
 
 
 
Income (loss) from operations
 
 
 
 
(48,118)
 
 
 
 
(220,786)
(169,323)
(157,690)
Depreciation and amortization
 
 
 
 
3,140 
 
 
 
 
15,030 
9,959 
8,911 
Capital expenditures
 
 
 
 
$ 13,916 
 
 
 
 
$ 71,590 
$ 43,217 
$ 25,966 
Business Segments, Concentration of Business, and Credit Risk and Significant Customers - Total Assets from Reportable Segments (Details) (USD $)
In Thousands, unless otherwise specified
Mar. 31, 2015
Mar. 31, 2014
Dec. 31, 2013
Dec. 31, 2012
Dec. 31, 2011
Reconciliations of total assets from reportable segments to the condensed consolidated balance sheets
 
 
 
 
 
Cash and cash equivalents
$ 225,143 
$ 245,088 
$ 237,125 
$ 110,247 
$ 263,606 
Unallocated deferred tax assets
29,083 
38,933 
35,632 
 
 
Total assets
1,169,933 
1,064,204 
1,259,729 
 
 
Reportable segments
 
 
 
 
 
Reconciliations of total assets from reportable segments to the condensed consolidated balance sheets
 
 
 
 
 
Total assets
698,174 
654,679 
801,796 
816,807 
 
Unallocated to Segments
 
 
 
 
 
Reconciliations of total assets from reportable segments to the condensed consolidated balance sheets
 
 
 
 
 
Other unallocated corporate assets
$ 217,533 
$ 125,504 
$ 185,176 
 
 
Business Segments, Concentration of Business, and Credit Risk and Significant Customers - Additional Information (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 12 Months Ended 3 Months Ended 12 Months Ended 3 Months Ended 12 Months Ended
Mar. 31, 2015
tannery
Mar. 31, 2014
Dec. 31, 2013
Dec. 31, 2012
Dec. 31, 2011
Mar. 31, 2014
International Net Sales
Mar. 31, 2015
International Net Sales
Dec. 31, 2013
International Net Sales
Dec. 31, 2012
International Net Sales
Mar. 31, 2014
Net Trade Accounts Receivable
Customer One
customer
Mar. 31, 2015
Net Trade Accounts Receivable
Customer One
customer
Dec. 31, 2013
Net Trade Accounts Receivable
Customer One
customer
Mar. 31, 2014
Net Trade Accounts Receivable
Customer Two
Mar. 31, 2015
Net Trade Accounts Receivable
Customer Two
Dec. 31, 2013
Net Trade Accounts Receivable
Customer Two
Mar. 31, 2015
US
Long-lived assets
Mar. 31, 2014
US
Long-lived assets
Dec. 31, 2013
US
Long-lived assets
Mar. 31, 2015
All other countries
Long-lived assets
Mar. 31, 2014
All other countries
Long-lived assets
Dec. 31, 2013
All other countries
Long-lived assets
Cash and cash equivalents
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Money market fund accounts
$ 127,900 
$ 143,816 
$ 154,105 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash
97,243 
101,272 
83,020 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total cash and cash equivalents
225,143 
245,088 
237,125 
110,247 
263,606 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Long-lived assets, which consist of property and equipment, by major country
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Property and equipment, by major country
$ 232,317 
$ 184,570 
$ 174,066 
 
 
 
 
 
 
 
 
 
 
 
 
$ 196,513 
$ 148,178 
$ 136,726 
$ 35,804 
$ 36,392 
$ 37,340 
Concentration risks
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Number of customers considered concentration risk
 
 
 
 
 
 
 
 
 
1 
1 
1 
 
 
 
 
 
 
 
 
 
Concentration risk (as a percent)
 
 
 
 
 
32.70% 
35.90% 
33.00% 
31.20% 
11.80% 
11.80% 
11.40% 
11.40% 
11.00% 
19.70% 
 
 
 
 
 
 
Number of tanneries used to source products
2 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Quarterly Summary of Information (Details) (USD $)
In Thousands, except Per Share data, unless otherwise specified
3 Months Ended 12 Months Ended
Mar. 31, 2015
Dec. 31, 2014
Sep. 30, 2014
Jun. 30, 2014
Mar. 31, 2014
Dec. 31, 2013
Sep. 30, 2013
Jun. 30, 2013
Mar. 31, 2013
Mar. 31, 2015
Dec. 31, 2013
Dec. 31, 2012
Summarized unaudited quarterly financial data
 
 
 
 
 
 
 
 
 
 
 
 
Net sales
$ 340,637 
$ 784,678 
$ 480,273 
$ 211,469 
$ 294,716 
$ 736,048 
$ 386,725 
$ 170,085 
$ 263,760 
$ 1,817,057 
$ 1,556,618 
$ 1,414,398 
Gross profit
152,324 
415,139 
223,873 
86,772 
144,260 
376,200 
166,892 
69,832 
123,559 
878,108 
736,483 
632,154 
Net (loss) income
$ 1,406 
$ 156,706 
$ 40,730 
$ (37,062)
$ (2,685)
$ 140,897 
$ 33,060 
$ (29,275)
$ 1,007 
$ 161,780 
$ 145,689 
$ 128,866 
Net income (loss) per share attributable to Deckers Outdoor Corporation common stockholders:
 
 
 
 
 
 
 
 
 
 
 
 
Basic (in dollars per share)
$ 0.04 
$ 4.54 
$ 1.18 
$ (1.07)
$ (0.08)
$ 4.08 
$ 0.96 
$ (0.85)
$ 0.03 
$ 4.70 
$ 4.23 
$ 3.49 
Diluted (in dollars per share)
$ 0.04 
$ 4.50 
$ 1.17 
$ (1.07)
$ (0.08)
$ 4.04 
$ 0.95 
$ (0.85)
$ 0.03 
$ 4.66 
$ 4.18 
$ 3.45 
Schedule II VALUATION AND QUALIFYING ACCOUNTS (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 12 Months Ended
Mar. 31, 2014
Mar. 31, 2015
Dec. 31, 2013
Dec. 31, 2012
Dec. 31, 2014
Allowance for doubtful accounts
 
 
 
 
 
Valuation and qualifying accounts
 
 
 
 
 
Balance at Beginning of Year
$ 2,039 
$ 1,798 
$ 2,782 
$ 1,719 
$ 1,798 
Additions
594 
1,107 
125 
2,128 
 
Deductions
835 
608 
868 
1,065 
 
Balance at End of Year
1,798 
2,297 
2,039 
2,782 
1,798 
Allowance for sales discounts
 
 
 
 
 
Valuation and qualifying accounts
 
 
 
 
 
Balance at Beginning of Year
3,540 
2,121 
3,836 
4,629 
2,121 
Additions
978 
68,620 
46,989 
35,759 
 
Deductions
2,397 
68,393 
47,285 
36,552 
 
Balance at End of Year
2,121 
2,348 
3,540 
3,836 
2,121 
Allowance for sales returns
 
 
 
 
 
Valuation and qualifying accounts
 
 
 
 
 
Balance at Beginning of Year
14,554 
8,586 
12,905 
11,313 
8,586 
Additions
674 
94,138 
67,800 
53,165 
 
Deductions
6,642 
93,192 
66,151 
51,573 
 
Balance at End of Year
8,586 
9,532 
14,554 
12,905 
8,586 
Chargeback allowance
 
 
 
 
 
Valuation and qualifying accounts
 
 
 
 
 
Balance at Beginning of Year
4,935 
3,064 
5,563 
4,031 
3,064 
Additions
213 
2,610 
187 
5,879 
 
Deductions
2,084 
1,633 
815 
4,347 
 
Balance at End of Year
$ 3,064 
$ 4,041 
$ 4,935 
$ 5,563 
$ 3,064