#1Cr CS cr OCS CI OC crocs™ Q2 2022 Investor Presentation August 2022#2cr CS cr OCS CI OC FORWARD-LOOKING STATEMENT This document includes estimates, projections, and statements relating to our plans, commitments, objectives, and expectations that are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, and Section 21E of the Securities Exchange Act of 1934. These statements include, but are not limited to, statements regarding potential impacts to our business related to our supply chain challenges, the COVID-19 pandemic, our financial condition, brand and liquidity outlook, and expectations regarding our future revenue, margins, non-GAAP adjustments, tax rate, earnings per share, gross leverage, and capital expenditures, the acquisition of HEYDUDE and benefits thereof, Crocs' strategy, plans, objectives, expectations (financial or otherwise) and intentions, future financial results and growth potential, including our plans for international growth, statements regarding full year, and third quarter 2022 and long term financial outlook and future profitability, cash flows, and brand strength, market share, anticipated product portfolio and our ability to deliver sustained, highly profitable growth. These statements involve known and unknown risks, uncertainties, and other factors, which may cause our actual results, performance, or achievements to be materially different from any future results, performances, or achievements expressed or implied by the forward-looking statements. These risks and uncertainties include, but are not limited to, the following: our expectations regarding supply chain disruptions; the COVID-19 pandemic and related government, private sector, and individual consumer responsive actions; cost inflation; current global financial conditions, including economic impacts resulting from the COVID-19 pandemic; the effect of competition in our industry; our ability to effectively manage our future growth or declines in revenues; changing consumer preferences; our ability to maintain and expand revenues and gross margin; our ability to accurately forecast consumer demand for our products; our ability to successfully implement our strategic plans; our ability to develop and sell new products; our ability to obtain and protect intellectual property rights; the effect of potential adverse currency exchange rate fluctuations and other international operating risks; and other factors described in our most recent Annual Report on Form 10-K under the heading "Risk Factors" and our subsequent filings with the Securities and Exchange Commission. Readers are encouraged to review that section and all other disclosures appearing in our filings with the Securities and Exchange Commission. All information in this document speaks as of August 4, 2022. We do not undertake any obligation to update publicly any forward-looking statements, whether as a result of the receipt of new information, future events, or otherwise, except as required by applicable law.#3cr CS cr OCS CI OC C ROW MCM EVE CONTENTS O O O BUSINESS & FINANCIAL HIGHLIGHTS BRAND PERFORMANCE FINANCIAL OUTLOOK APPENDIX#4cr CS cr OCS CI OC C OUR VISION MARGARITAVILLE crocs Everyone Comfortable In Their Own Shoes he LONT SALT#5cr CS cr OCS CI OC OUR VALUES The Path We Choose to Walk DELIGHTFULLY DEMOCRATIC We celebrate one-of-a-kinds and stand together with all different kinds. IMAGINATIVE INNOVATION We stretch the possibilities of design and creative thinking so you can reach your highest potential. PEOPLE-PURPOSED DESIGN We think people-first at every step. We design for everything you do and everywhere you go. UNAPOLOGETIC OPTIMISM We make a choice every day to have an open mind and look on the bright and colorful side. INHERENT SIMPLICITY We know smart doesn't have to mean complicated. So we keep things simple, light, and totally intuitive. CONFIDENTLY COMFORTABLE We support comfort on every level, because when you're comfortable, you can do anything.#6cr CS cr OCS CIE OC! CE BUSINESS & FINANCIAL HIGHLIGHTS boob DO T.SA#7Cr CS cr OCS CI OC BUSINESS & FINANCIAL HIGHLIGHTS I am very proud of our second quarter results, I am particularly excited by record revenues for the Crocs Brand and the strong growth internationally. HEYDUDE continues to outperform our expectations and we now expect nearly $1 billion in pro forma* revenues this year. We have two incredibly strong brands that are well positioned to meet the needs of our core consumer with our value and comfort proposition. The consumer demand for both our brands is exceptional and we expect both brands to gain market share in this dynamic environment. We remain incredibly confident in our long term growth and our ability to generate best-in-class profitability." - Andrew Rees, CEO * Assumes the acquisition closed on January 1, 2022#8cr CS cr OCS CI OC C BUSINESS & FINANCIAL HIGHLIGHTS Q2 2022 REVENUE GROWTH SUMMARY $965M Crocs, Inc. +51% / 56% CC +8% Crocs Brand DTC Comp Growth 1. Assumes the acquisition closed on January 1, 2021 $732M Crocs Brand +14% / 19% CC +21% Digital Sales Growth (Crocs Brand CC) $232M HEYDUDE Brand +96% PF(1) 36% Digital Penetration#9Cr CS cr OCS CI OC BUSINESS & FINANCIAL HIGHLIGHTS Q2 REVENUE BREAKDOWN HEYDUDE 24% Brand Crocs 76% 1. 2. Geography (¹) EMEALA 22% Asia Pacific 20% North America Digital Penetration (2) 58% O O Digital 36% WHL 58% Geography is for Crocs Brand only. Digital sales include Crocs.com, heydudeshoesusa.com, third-party market places (e.g. Tmall), and e-tailers (e.g. Amazon, Zappos, Zalando). Channel DTC 42%#10Cr CS cr OCS CI OC BUSINESS & FINANCIAL HIGHLIGHTS Q2 2022 FINANCIAL HIGHLIGHTS Revenues ($M) Gross Margin Adjusted Gross Margin(²) Adjusted SG&A as % of Revenue(2) Operating Margin Adjusted Operating Margin(2) Diluted EPS Adjusted Diluted EPS (2) 1. Revenue growth on a constant currency basis, which is a Non-GAAP Financial Measure. See further details in Appendix. 2. See reconciliation to GAAP equivalents in Appendix. Q2 $965 51.6% 55.2% 25.1% 25.7% 30.1% $2.58 $3.24 B/(W) vs. PY +56% (1) (1,010) bp (660) bp 610 bp (480) bp (60) bp (48)% +45% 10#11cr CS cr OCS CIE OC! CE BRAND PERFORMANCE boob BDO T.SA 11#12cr CS cr OCS CI OC Cl BRAND PERFORMANCE CROCS BRAND Q2 HIGHLIGHTS Revenues +19% CC vs. PY and Russia and China negatively impacted growth by ~3% ● ● ● ● • EMEALA +48% CC vs. PY O • Asia Pacific +28% CC vs. PY O Adj. Gross Margin decreased 390 bp driven primarily by freight headwinds of 445 bp including a 340 bp impact of incremental air freight, and 105 bp of currency Vogue featured Crush sandal in an article entitled "These ugly-chic sandals have gotten me the most compliments this summer." Launched innovative digital marketing campaign in the metaverse featuring Saweetie 1. 2. Revenues Adj. Gross Margin(2) Adj. SG&A as % of Revenue(2) Adj. Operating Margin(2) Q2'2022 $732M 57.9% 23.0% 34.9% B/(W) vs. PY +19.4% (1) (390) bp 120 bp (270) bp Revenue growth on a constant currency basis, which is a Non-GAAP Financial Measure. See further details in Appendix. See reconciliation to GAAP equivalents in Appendix. ap CS CS Cr s crocs crocs cr crocs crocs crocs crocs C crocs crocs croc rocs crocs crocs c ocs crocs crocs croc Grocs crocs#13Cr CS cr OCS CI OC Cl BRAND PERFORMANCE CROCS BRAND Q2 REVENUE GROWTH Geography Channel +8% Americas +21% Digital Sales CC Growth +17% / 28% CC Asia +8% DTC Comparable Growth +33% / 48% CC EMEALA +35% Wholesale CC Growth CS CS Cr crocs ocs cr crocs crocs crocs C crocs crocs croc rocs crocs crocs c ocs crocs crocs croc Grocs crocs#14Cr CS cr OCS CI OC BRAND PERFORMANCE CROCS BRAND Q2 REVENUE BREAKDOWN EMEALA 22% Asia 20% Geography Americas 58% Digital Penetration* O Digital 37% * Digital sales include Crocs.com, third-party market places (e.g. Tmall), and e-tailers (e.g. Amazon, Zappos, Zalando) WHL 54% Channel DTC 46% CS CS C s crocs crocs cr crocs crocs crocs crocs C crocs crocs croc rocs crocs crocs c ocs crocs crocs croc Grocs crocs#15Cr CS cr OCS CI OC Cl BRAND PERFORMANCE BUILDING CROCS BRAND TO $5B+ BY 2026E PLANNED GROWTH INITIATIVES ● ● ● ● Invest in digital to be 50%+ of long-term Crocs Brand revenues or $2.5B+ Grow Sandals revenues by 4x to $1.2B+ Double Jibbitz revenues Increase Asia region to become ~25% of long-term Crocs Brand revenues Grow China from <5% of Crocs Brand revenues to ~10% Continue to deliver innovative product & marketing CS CS C s crocs crocs cr crocs crocs crocs crocs C crocs crocs croc rocs crocs crocs c ocs crocs crocs croc Grocs crocs#16BRAND PERFORMANCE HEYDUDE BRAND Q2 HIGHLIGHTS • Q2 Revenues of $232M exceeded expectations • Revenue growth of +96% vs PY on a pro forma basis(1) O ● ● ● ● FY22 Revenues now expected to be nearly $1 billion on a pro forma basis(2) Introduced an updated brand identity and launched new HEYDUDE brand campaign Integration of the brand is on track and plan to continue investing rapidly in capabilities to maximize growth of brand Expect stronger Gross Margins in H2 2022 as HEYDUDE benefits from Crocs' freight rates Revenue Adj. Gross Margin(³) SG&A as % of Revenue (4) Adj. Operating Margin(3) Q2'2022 $232M 47.1% 14.5% 32.6% 1. Assumes the acquisition closed on January 1, 2021 2. Assumes the acquisition closed on January 1, 2022 3. See reconciliation to GAAP equivalents in Appendix 4. Non-GAAP SG&A adjustments were not made within the HEYDUDE brand 16#17BRAND PERFORMANCE HEYDUDE REBRAND New Brand Identity HEY DUDE TM GOOD TO GO-TO™ GO-TO: (n.) (v.) (adj.) \ gō-,tü \ Proven. Tested. Tried and true. Those people and things you can't live without. They are now shoes. HEYDUDE™ shoes. Brand Marketing "I was instantly transported to cold IPA beers and the land of clouds."⁹ Someone actually wrote this 17#18BRAND PERFORMANCE MAXIMIZING HEYDUDE GROWTH PLANNED GROWTH INITIATIVES ● ● ● ● Invest in industry-leading marketing to build brand awareness Enhance digital capabilities to further accelerate digital Leverage Crocs strong wholesale relationships to enhance distribution Leverage Crocs distribution for global growth Invest to scale supply chain and gain efficiencies Test selective retail footprint for enhanced brand awareness 18#19cr CS cr OCS CIE OC! CE FINANCIAL OUTLOOK boob BDO T.SA 19#20cr CS cr OCS CI OC FINANCIAL OUTLOOK 2022E GUIDANCE (numbers on reported basis, unless otherwise noted) Total Revenues crocs™ HEY DUDE GOOD TO GO-TO Adjusted Operating Margin(4) Adjusted Operating Income(4) Adjusted One Time Costs (4) Adjusted Tax Rate(4) Adjusted Diluted EPS(4) 8. Q3 2022E $915 to $955M $680 to $700M +15% to 18% CC(1) $235 to $255M -25% to 26% (5) ~$10M(8) FY 2022E $3.395 to $3.505B $2.545 to $2.615B +14% to 17% CC (2) $850 to $890M (3) -26% to 27% (6,7) -$880 to $945M(6,7) ~$130(7) ~22% $9.50 to $10.30 Capital Expenditures $170 to $200M 1. Crocs Brand expected revenue growth for Q3 2022E of approximately 15% to 18% on a constant currency basis implies 9% to 12% growth on a reported basis and expected revenues of approximately $680 to $700M on a reported basis. 2. Crocs Brand expected revenue growth for FY 2022E of approximately 14% to 17% on a constant currency basis implies 10% to 13% growth on a reported basis and expected revenues of $2.545 to $2.615B 3. Including the period of time prior to the closing of the acquisition, HEYDUDE 2022E revenues expected to be approximately $940 to $980M. 4. See reconciliation GAAP equivalents in Appendix. 5. 6. 7. Includes an expected approximately $15M impact from air freight embedded in gross margin for Q3. Includes an expected incremental $75M of air freight embedded in gross margin for full year 2022. Non-GAAP adjustments include an expected: $55M in SG&A costs, primarily associated with the HEYDUDE acquisition, and an additional $75M of non-cash costs in cost of sales, primarily related to the write up of HEYDUDE inventory costs to fair market value at the close of acquisition for full year 2022. Non-GAAP adjustments include an expected: $10M in SG&A costs, primarily related to the HEYDUDE integration costs for Q3. 20#21Cr CS cr OCS CI OC FINANCIAL OUTLOOK LONG TERM GUIDANCE* Revenues Revenue Growth Adjusted Operating Margin Adjusted Tax Rate Capital Expenditures crocs™ $5B+ 17%+ -25% ~3% of revenues HEY DUDE GOOD TO GO-TO $1B+ 20%+ Crocs, Inc. $6B+ 26%+ * Crocs Brand long-term guidance provided here is on a pre-acquisition standalone basis. Long term for Crocs Brand and Crocs, Inc. defined as 2026E and for HEYDUDE defined as 2024E. Please refer to Appendix for definitions and Non-GAAP reconciliations. 21#22Cr CS cr OCS CI OC FINANCIAL OUTLOOK CAPITAL ALLOCATION PRIORITIES Business Investment Invest to support long-term, profitable growth Deleverage to <2.0x Gross Leverage Committed to working towards deleveraging quickly Shareholder Returns Share repurchases on hold until gross leverage is <2.0x, which we do not expect to occur in 2022 22#23Cr CS cr OCS CI OC FINANCIAL OUTLOOK LEVERAGE OUTLOOK O Committed to quickly deleveraging and targeting to be below 2.0x gross leverage by mid-year 2023 • Share repurchases on O hold until gross leverage is <2.0x, which we do not expect to occur in 2022 Net Debt/Adj. EBITDA(2) Gross Debt / Adjusted EBITDA Outlook(1) 1.1x 0.8x YE 2021 3.1x 2.9x PF YE 2021 for HEYDUDE 2.8x 2.6x PF Q2 2022 1. Assumes excess free cash flow used to repay borrowings. Gross Debt / Adjusted EBITDA calculated as: Total Gross Debt / Trailing Twelve Months ("TTM") Adjusted EBITDA. Adjusted EBITDA calculated as Adjusted Operating Income plus depreciation and amortization. Please refer to Appendix for definition and Non-GAAP reconciliation. a. b. Pro forma ("PF") includes HEYDUDE for the period prior to acquisition close (assuming the acquisition had closed on the first day of such twelve month period). 2. Net Debt / Adjusted EBITDA calculated as: (Total Gross Debt - Cash and Cash Equivalents) / TTM Adjusted EBITDA, as calculated above. ≤ 2.0x Mid-Year 2023E 23#24cr CS cr OCS CIE OC! CE APPENDIX boob BDO T.SA 24#25Cr CS cr OCS CI OC APPENDIX NON-GAAP RECONCILIATION Non-GAAP Cost of Sales, Gross Profit, and Gross Margin Reconciliation: Six Months Ended June 30, 2022 2021 GAAP revenues GAAP cost of sales Distribution centers (1) HEYDUDE inventory fair value step-up (2) Inventory reserve in Russia (3) Total adjustments Non-GAAP cost of sales GAAP gross profit GAAP gross margin Non-GAAP gross profit Non-GAAP gross margin SA Three Months Ended June 30, 2022 2021 964,581 $ 466,848 (1,389) (34,323) 575 (35,137) 431,711 $ 497,733 51.6% 532,870 55.2 % (in thousands) 640,773 $ 245,592 (1,115) (1,115) 244,477 395,181 61.7 % 396,296 61.8 % $ 1,624,729 $ 802,072 (2,580) (62,250) (1,225) (66,055) 736,017 822,657 50.6% 888,712 54.7% $ 1,100,871 452,471 (2,100) (2,100) 450,371 648,400 58.9 % 650,500 59.1 % (1) Represents expenses, including expansion costs and duplicate rent costs, related to our distribution centers in Dayton, Ohio and Dordrecht, the Netherlands. (2) Represents a step-up of HEYDUDE inventory costs to fair value upon the close of the acquisition on February 17, 2022. (3) Represents the net impact of an inventory reserve expense in our EMEALA segment associated with the continued shutdown of our direct operations in Russia. 25#26Cr CS cr OCS CI OC APPENDIX NON-GAAP RECONCILIATION (CONT'D) Non-GAAP Selling, General and Administrative Expenses Reconciliation: Three Months Ended June 30, 2022 2021 GAAP revenues GAAP selling, general and administrative expenses HEYDUDE acquisition-related costs (1) Impact of shutdown of Russia direct operations (2) Duplicate headquarters rent (3) Total adjustments Non-GAAP selling, general and administrative expenses (4) GAAP selling, general and administrative expenses as a percent of revenues Non-GAAP selling, general and administrative expenses as a percent of revenues SA $ 964,581 $ 249,769 (5,741) (570) (1,202) (7,513) 242,256 $ 25.9 % 25.1 % (in thousands) 640,773 199,859 199,859 31.2 % 31.2 % $ Six Months Ended June 30, 2022 2021 1,624,729 456,016 (26,342) (5,837) (1,202) (33,381) 422,635 (1) Represents costs related to the acquisition and integration of HEYDUDE, including legal, professional, consulting, and transaction fees. (2) Represents various costs associated with the continued shutdown of our direct operations in Russia, including severance and lease exit costs and penalties. (3) Represents duplicate rent costs associated with our upcoming move to a new headquarters. (4) Non-GAAP selling, general and administrative expenses are presented gross of tax. 28.1 % 26.0 % $ $ 1,100,871 328,392 328,392 29.8% 29.8 % 26#27Cr CS cr OCS CI OC APPENDIX NON-GAAP RECONCILIATION (CONT'D) Non-GAAP Income from Operations and Operating Margin Reconciliation: Three Months Ended June 30, 2022 2021 GAAP revenues GAAP income from operations Non-GAAP cost of sales adjustments (1) Non-GAAP selling, general and administrative expenses adjustments (2) Non-GAAP income from operations GAAP operating margin Non-GAAP operating margin 964,581 247,964 35,137 7,513 290,614 $ 25.7 % 30.1 % (in thousands) 640,773 $ 195,322 1,115 196,437 30.5% 30.7 % $ Six Months Ended June 30, 2022 2021 1,624,729 366,641 66,055 33,381 466,077 22.6 % 28.7 % $ 1,100,871 320,008 2,100 322,108 29.1 % 29.3 % (1) See 'Non-GAAP cost of sales, gross profit, and gross margin reconciliation' above for more details. (2) See 'Non-GAAP selling, general and administrative expenses and selling, general and administrative expenses as a percent of revenues reconciliation' above for more details. 27#28cr CS cr OCS CI OC C APPENDIX NON-GAAP RECONCILIATION (CONT'D) Non-GAAP Income Tax Expense (Benefit) and Effective Tax Rate Reconciliation: Three Months Ended June 30, 2022 Six Months Ended June 30, 2022 2021 2021 GAAP income from operations GAAP income before income taxes Non-GAAP income from operations (1) GAAP non-operating income (expenses): Foreign currency losses, net Interest income Interest expense Other income (expense), net Non-GAAP income before income taxes $ GAAP income tax expense Tax effect of non-GAAP operating adjustments Impact of intra-entity IP transfers (2) Non-GAAP income tax expense GAAP effective income tax rate Non-GAAP effective income tax rate $ 247,964 214,304 290,614 (1,202) 86 (32,963) 419 256,954 53,989 8,416 (6,799) 55,606 25.2 % 21.6% $ (in thousands) 195,322 $ 190,566 196,437 (117) 71 (4,712) 2 191,681 (128,388) 279 175,411 47,302 (67.4)% 24.7 % $ 366,641 313,364 466,077 (722) 188 (52,215) (528) 412,800 80,289 16,038 (9,906) 86,421 25.6 % 20.9 % $ $ 320,008 313,154 322,108 (621) 98 (6,344) 13 315,254 (104,198) 528 175,059 71,389 (33.3)% 22.6 % (1) See 'Non-GAAP income from operations and operating margin reconciliation' above for more details. (2) In the fourth quarter of 2020, and subsequently in the fourth quarter of 2021, we made changes to our international legal structure, including an intra-entity transfer of certain intellectual property rights, primarily to align with current and future international operations. The transfers resulted in a step-up in the tax basis of intellectual property rights and correlated increases in foreign deferred tax assets based on the fair value of the transferred intellectual property rights. This adjustment represents the current period impact of these transfers. The prior year adjustment also includes the release of the valuation allowance as a result of a tax law change. 28#29cr CS cr OCS CI OC APPENDIX NON-GAAP RECONCILIATION (CONT'D) Non-GAAP Earnings Per Share Reconciliation: Numerator: GAAP net income Non-GAAP cost of sales adjustments (1) Non-GAAP selling, general and administrative expenses adjustments (2) Tax effect of non-GAAP adjustments Non-GAAP net income Denominator: GAAP weighted average common shares outstanding - basic Plus: GAAP dilutive effect of stock options and unvested restricted stock GAAP weighted average common shares outstanding - diluted GAAP net income per common share: Basic Diluted Non-GAAP net income per common share: Basic Diluted 66 GAGA $ $ Three Months Ended June 30, 2022 160,315 $ 35,137 7,513 (1,617) 201,348 $ 61,590 646 62,236 2.60 2.58 ᏌᏊ $ 3.27 $ 3.24 $ 2021 (in thousands, except per share data) 318,954 $ 1,115 (175,690) 144,379 63,595 1,045 64,640 $ 5.02 $ 4.93 $ Six Months Ended June 30, 2022 2021 2.27 $ 2.23 $ 233,075 $ 66,055 33,381 (6,132) 326,379 $ 60,712 859 61,571 3.84 $ 3.79 $ 5.38 5.30 $ ᏌᏊ Ꭿ $ 417,352 2,100 (175,587) 243,865 (1) See 'Non-GAAP cost of sales, gross profit, and gross margin reconciliation' above for more information. (2) See 'Non-GAAP selling, general and administrative expenses and selling, general and administrative expenses as a percent of revenues reconciliation' above for more information. 64,526 1,218 65,744 6.47 6.35 3.78 3.71 29#30cr CS cr OCS CI OC APPENDIX NON-GAAP RECONCILIATION (CONT'D) Reconciliation of GAAP to Non-GAAP Financial Guidance: Third Quarter 2022: Non-GAAP operating margin reconciliation: GAAP operating margin Non-GAAP adjustments, primarily associated with the HEYDUDE integration and duplicate rent (1) Non-GAAP operating margin Full Year 2022: Non-GAAP operating margin and operating income reconciliation: GAAP operating margin and operating income Non-GAAP adjustments, primarily associated with the HEYDUDE acquisition (1) Non-GAAP operating margin and operating income Non-GAAP effective tax rate reconciliation: GAAP effective tax rate Non-GAAP adjustments associated with amortization of intellectual property(2) Non-GAAP effective tax rate Non-GAAP diluted earnings per share reconciliation: GAAP diluted earnings per share Non-GAAP adjustments, primarily associated with the HEYDUDE acquisition and amortization of intellectual property (1)(2) Non-GAAP diluted earnings per share Approximately: 24% to 25% 1% 25% to 26% Approximately: ($ in millions, except per share data) 22% to 23% 4% 26% to 27% 25% (3)% 22% $7.50 to $8.30 $2.00 $9.50 to $10.30 $750 to $815 $130 $880 to $945 (1) In the third quarter of 2022, we expect to incur $10 million in SG&A, primarily associated with HEYDUDE integration costs and duplicate rent associated with our upcoming move to a new headquarters. For the full year 2022, we expect to incur $55 million in SG&A, primarily associated with the HEYDUDE acquisition and integration, and a total $75 million in cost of sales, primarily related to the write up of HEYDUDE inventory costs to fair market value at the close of acquisition. (2) In the fourth quarter of 2020, and subsequently in the fourth quarter of 2021, we made changes to our international legal structure, including an intra-entity transfer of certain intellectual property rights, primarily to align with current and future international operations. This adjustment represents the amortization of the deferred tax asset related to these intellectual property rights in this period and the tax impact of cost of sales and SG&A non-GAAP adjustments. Our long-term guidance for "Non-GAAP Operating Margin" and "Non-GAAP Tax Rate" are non-GAAP financial measures that exclude or otherwise has been adjusted for special items from our U.S. GAAP financial statements, such as inventory write-offs, duplicate rent costs, bad debt expense, and the HEYDUDE acquisition. We consider these items to be necessary adjustments for purposes of evaluating our ongoing business performance and are often considered non-recurring. Such adjustments are subjective and involve significant management judgment. We are unable to reconcile Crocs Brand 2026E and HEYDUDE Brand 2024E non-GAAP operating margin and Crocs brand non-GAAP tax rate guidance measures to their nearest U.S. GAAP measures without unreasonable efforts because we are unable to predict with a reasonable degree of certainty the actual impact of the special and other non-core items. By their very nature, special and other non-core items are difficult to anticipate with precision because they are generally associated with unexpected and unplanned events that impact our company and its financial results. Therefore, we are unable to provide a reconciliation of these measures 30#31cr CS cr CS Cl OC C APPENDIX NON-GAAP RECONCILIATION (CONT'D) Non-GAAP Gross Margin Reconciliation by Brand: GAAP Crocs Brand gross margin Non-GAAP adjustments: Distribution centers (1) Inventory reserve in Russia (2) Non-GAAP Crocs Brand gross margin GAAP HEYDUDE Brand gross margin Non-GAAP adjustments: Inventory fair value step-up (3) Non-GAAP HEYDUDE Brand gross margin Three Months Ended June 30, 2022 57.7 % 0.2 % less than (0.1)% 57.9 % Three Months Ended June 30, 2022 32.4% 14.7% 47.1 % 2021 61.7 % 0.1 % - % 61.8 % (1) Represents expenses, including expansion costs and duplicate rent costs, related to our distribution centers in Dayton, Ohio and Dordrecht, the Netherlands. (2) Represents the net impact of an inventory reserve expense in our EMEALA segment associated with the continued shutdown of our direct operations in Russia. (3) Represents a step-up of HEYDUDE inventory costs to fair value upon the close of the acquisition on February 17, 2022. 31#32Cr CS cr CS CI OC C APPENDIX NON-GAAP RECONCILIATION (CONT'D) Non-GAAP Selling, General and Administrative Expenses Reconciliation by Brand: GAAP Crocs Brand selling, general and administrative expenses as a percent of revenues Non-GAAP adjustments: Impact of shutdown of Russia direct operations (1) Non-GAAP Crocs Brand selling, general and administrative expenses as a percent of revenues Three Months Ended June 30, 2022 2021 23.1 % (0.1)% 23.0 % 24.2 % % 24.2 % (1) Represents various costs associated with the continued shutdown of our direct operations in Russia, including severance and lease exit costs and penalties. 32#33Cr CS cr OCS CI OC APPENDIX NON-GAAP RECONCILIATION (CONT'D) Non-GAAP Income from Operations and Operating Margin Reconciliation by Brand: GAAP Crocs Brand operating margin Non-GAAP cost of sales adjustments (1) Non-GAAP selling, general and administrative expenses adjustments (2) Non-GAAP Crocs Brand operating margin GAAP HEYDUDE Brand operating margin Non-GAAP cost of sales adjustments (1) Non-GAAP selling, general and administrative expenses adjustments Non-GAAP HEYDUDE Brand operating margin Three Months Ended June 30, 2022 34.7 % 0.1% 0.1 % 34.9 % Three Months Ended June 30, 2022 17.9 % 14.7 % - % 32.6 % 2021 37.5% 0.1% % - 37.6% (1) See 'Non-GAAP cost of sales, gross profit, and gross margin reconciliation' by brand above for more information. (2) See 'Non-GAAP selling, general and administrative expenses and selling, general and administrative expenses as a percent of revenues reconciliation' by brand above for more information. 33