Q3 2022 Investor Presentation
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APPENDIX
NON-GAAP RECONCILIATION (CONT'D)
Reconciliation of GAAP to Non-GAAP Financial Guidance:
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:
($ in millions, except per share data)
23%
4%
27%
25%
(4)%
21%
$7.95 to $8.30
$2.00
$9.95 to $10.30
$790 to $820
$130
$920 to $950
(1) For the full year 2022, we expect to incur $55 million in SG&A costs, 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 "Consolidated adjusted operating margin" is a non-GAAP financial measure that excludes or otherwise has been adjusted for special items from our U.S. GAAP financial statements. 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
expected long-term consolidated adjusted operating margin to its nearest U.S. GAAP measure 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.
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