Segment Information

The Company operates its business through four operating segments—MK Retail, MK Wholesale, MK Licensing and Jimmy Choo—which are based on its business activities and organization. The reportable segments are segments of the Company for which separate financial information is available and for which operating results are evaluated regularly by the Company’s chief operating decision maker in deciding how to allocate resources, as well as in assessing performance. The primary key performance indicators are revenue and operating income for each segment. The Company’s reportable segments represent channels of distribution that offer similar merchandise, customer experience and sales/marketing strategies.

The Company’s four reportable segments are as follows:

•

MK Retail — segment includes sales through Michael Kors operated stores, including “Collection,” “Lifestyle” including “concessions,” and outlet stores located throughout the Americas (U.S., Canada and Latin America, excluding Brazil), Europe and certain parts of Asia, as well as Michael Kors e-commerce sales. Products sold through the MK Retail segment include women’s apparel, accessories (which include handbags and small leather goods such as wallets), men’s apparel, footwear and licensed products, such as watches, jewelry, fragrances and beauty, and eyewear.

•

MK Wholesale — segment includes sales primarily to major department stores and specialty shops throughout the Americas, Europe and Asia. Products sold through the MK Wholesale segment include accessories (which include handbags and small leather goods such as wallets), footwear and women’s and men’s apparel. The Company also has wholesale arrangements pursuant to which it sells products to Michael Kors geographic licensees in certain parts of EMEA and Asia, as well as in Brazil.


•	MK Licensing — segment includes royalties and other contributions earned on licensed products and use of the Michael Kors trademarks and rights granted to third parties for the right to operate retail stores and/or sell the Company’s products in certain geographic regions such as Brazil, the Middle East, South Africa, Eastern Europe, certain parts of Asia and Australia.

•

Jimmy Choo — segment includes revenue generated from sales of luxury footwear, handbags and small leather goods through directly operated Jimmy Choo stores throughout the Americas, EMEA and certain parts of Asia, as well as through Jimmy Choo e-commerce sites. In addition, revenue is generated through wholesale sales to distribution partners (including geographic licensing arrangements), multi-brand department stores and specialty stores worldwide, as well as through product license agreements in connection with the manufacturing and sale of fragrance, sunglasses and eyewear.

All intercompany revenues are eliminated in consolidation and are not reviewed when evaluating segment performance. Corporate overhead expenses are allocated to the segments based upon revenue or other allocation methods.

The following table presents the key performance information of the Company’s reportable segments (in millions):



	Three Months Ended				Nine Months Ended
	December 29, 2018		December 30, 2017		December 29, 2018		December 30, 2017
Total revenue:
MK Retail	$	838.0	$	846.3	$	2,121.4	$	2,111.2
MK Wholesale	394.9		430.8		1,215.5		1,198.0
MK Licensing	43.5		48.3		106.4		115.2
Michael Kors	1,276.4		1,325.4		3,443.3		3,424.4
Jimmy Choo	161.6		114.7		451.0		114.7
Total revenue	$	1,438.0	$	1,440.1	$	3,894.3	$	3,539.1

Income from operations:
MK Retail	$	149.9	$	180.4	$	310.3	$	341.6
MK Wholesale	108.6		100.5		336.2		263.6
MK Licensing	26.0		26.9		44.9		51.1
Michael Kors	284.5		307.8		691.4		656.3
Jimmy Choo	5.5		5.7		3.2		5.7
Income from operations	$	290.0	$	313.5	$	694.6	$	662.0

Depreciation and amortization expense for each segment are as follows (in millions):



	Three Months Ended				Nine Months Ended
	December 29, 2018		December 30, 2017		December 29, 2018		December 30, 2017
Depreciation and amortization:
MK Retail	$	30.8	$	33.7	$	95.4	$	98.8
MK Wholesale	11.5		13.9		38.0		43.5
MK Licensing	0.6		0.6		1.7		1.8
Michael Kors	42.9		48.2		135.1		144.1
Jimmy Choo	8.6		5.8		25.0		5.8
Total depreciation and amortization	$	51.5	$	54.0	$	160.1	$	149.9

Total revenue (based on country of origin), and long-lived assets by geographic location are as follows (in millions):



	Three Months Ended				Nine Months Ended
	December 29, 2018		December 30, 2017		December 29, 2018		December 30, 2017
Total revenue:
The Americas (U.S., Canada and Latin America) ⁽¹⁾	$	926.8	$	946.6	$	2,437.7	$	2,332.6
EMEA	334.2		333.1		925.2		805.0
Asia	177.0		160.4		531.4		401.5
Total revenue	$	1,438.0	$	1,440.1	$	3,894.3	$	3,539.1



	As of
	December 29, 2018		March 31, 2018
Long-lived assets, excluding goodwill:
The Americas (U.S., Canada and Latin America)⁽¹⁾	$	300.9	$	327.3
EMEA	936.2		1,050.3
Asia	439.4		441.3
Total long-lived assets, excluding goodwill	$	1,676.5	$	1,818.9


⁽¹⁾	Total revenue earned in the U.S. were $868.9 million and $2.274 billion for the three and nine months ended December 29, 2018 and $883.2 million and $2.164 billion for the three and nine months ended December 30, 2017. Long-lived assets located in the U.S. as of December 29, 2018 and March 31, 2018 were $277.1 million and $303.3 million, respectively.

The following table presents the Company’s goodwill by reportable segment (in millions):



	As of
	December 29, 2018		March 31, 2018
MK Retail	$	91.9	$	91.9
MK Wholesale	25.9		25.9
MK Licensing	1.9		1.9
Jimmy Choo	660.3		728.0
Total goodwill	$	780.0	$	847.7