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Operating Segments and Geographic Information
6 Months Ended
Jun. 30, 2016
Segment Reporting [Abstract]  
Operating Segments & Geographic Information
OPERATING SEGMENTS AND GEOGRAPHIC INFORMATION
 
Crocs has three reportable operating segments based on the geographic nature of the Company’s operations: Americas, Asia Pacific, and Europe. Crocs’ “Other businesses” category aggregates insignificant operating segments that do not meet the reportable segment threshold and includes manufacturing operations located in Mexico, Italy and Asia. The composition of the Company’s reportable operating segments is consistent with that used by Crocs’ chief operating decision maker (“CODM”) to evaluate performance and allocate resources.
 
Each of the reportable operating segments derives its revenues from the sale of footwear and accessories to external customers as well as intersegment sales. Revenues of the ‘Other businesses’ category are primarily made up of intersegment sales. The remaining revenues for ‘Other businesses’ represent non-footwear product sales to external customers. Intersegment sales are not included in the measurement of segment operating income or regularly reviewed by the CODM and are eliminated when deriving total consolidated revenues.
 
Segment performance is evaluated based on segment results without allocating corporate expenses, or indirect general, administrative, and other expenses. Segment profits or losses include adjustments to eliminate intersegment sales. As such, reconciling items for segment operating income represent unallocated corporate and other expenses as well as intersegment eliminations.

The following tables set forth information related to Crocs’ reportable operating business segments as of and for the three and six months ended June 30, 2016 and 2015
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
2016
 
2015
 
2016
 
2015
 
(in thousands)
Revenues:
 
 
 
 
 
 
 
Americas
$
135,097

 
$
143,119

 
$
259,227

 
$
248,888

Asia Pacific (1)
130,846

 
149,557

 
235,347

 
249,332

Europe
57,660

 
52,668

 
107,997

 
109,092

Total segment revenues
323,603

 
345,344

 
602,571

 
607,312

Other businesses
225

 
327

 
397

 
552

Total consolidated revenues
$
323,828

 
$
345,671

 
$
602,968

 
$
607,864

 
 
 
 
 
 
 
 
Operating income (2):
 
 
 
 
 
 
 
Americas
$
18,015

 
$
21,771

 
$
34,592

 
$
37,149

Asia Pacific
34,533

 
41,262

 
60,383

 
58,597

Europe
8,437

 
6,105

 
14,960

 
14,343

Total segment operating income
60,985

 
69,138

 
109,935

 
110,089

 
 
 
 
 
 
 
 
Reconciliation of total segment operating income to income before income taxes:
 

 
 

 
 
 
 
Other businesses
(6,038
)
 
(6,890
)
 
(12,111
)
 
(12,294
)
Unallocated corporate and other (3)
(34,342
)
 
(45,899
)
 
(62,976
)
 
(83,808
)
Income from operations
20,605

 
16,349

 
34,848

 
13,987

Foreign currency transaction gain (loss), net
(1,700
)
 
(217
)
 
(2,947
)
 
277

Interest income
164

 
196

 
380

 
484

Interest expense
(234
)
 
(260
)
 
(477
)
 
(479
)
Other expense, net
(189
)
 
(80
)
 
(107
)
 
(411
)
Income before income taxes
$
18,646

 
$
15,988

 
$
31,697

 
$
13,858

 
 
 
 
 
 
 
 
Depreciation and amortization:
 
 
 
 
 
 
 
Americas
$
1,504

 
$
1,950

 
$
2,982

 
$
3,924

Asia Pacific
992

 
1,128

 
2,070

 
2,341

Europe
718

 
644

 
1,497

 
1,446

Total segment depreciation and amortization
3,214

 
3,722

 
6,549

 
7,711

Other businesses
1,736

 
2,063

 
3,446

 
4,051

Unallocated corporate and other
3,501

 
3,604

 
7,036

 
7,346

Total consolidated depreciation and amortization
$
8,451

 
$
9,389

 
$
17,031

 
$
19,108

__________________________________________________________________
(1)         Revenues for the three and six months ended June 30, 2016 were negatively impacted by approximately $3.0 million as a result of the sale of the Company’s South Africa operations, which was completed on April 15, 2016.

(2)         Operating income for the three months ended June 30, 2015 was negatively impacted by restructuring charges of $1.3 million and $0.4 million for the Asia Pacific and Europe segments, respectively. Operating income for the six months ended June 30, 2015 was negatively impacted by restructuring charges of $0.5 million, $3.0 million, and $1.5 million for the Americas, Asia Pacific, and Europe segments, respectively. As we completed our restructure efforts in 2015, we had no similar expenses in the 2016 periods presented.
 
(3)         Includes a corporate component consisting primarily of corporate support and administrative functions, costs associated with share-based compensation, research and development, brand marketing, legal, restructuring, depreciation and amortization of corporate and other assets not allocated to operating segments, and costs of the same nature related to certain corporate holding companies. The decrease in unallocated corporate and other operating loss of $11.6 million for the three months ended June 30, 2016 is primarily associated with: (i) various cost reductions related to with the Company’s 2015 restructuring efforts (including a $3.8 million decrease in contract labor and professional fees and a $3.2 million decrease in employee compensation) and (ii) a $5.0 million decrease associated with nonrecurring disbursements made to invalid vendors. The decrease in operating loss of $20.8 million for the six months ended June 30, 2016 is primarily associated with: (i) various cost reductions related to the Company’s 2015 restructuring efforts (including a $4.4 million decrease in employee compensation and a $4.1 million decrease in contract labor and professional fees) and (ii) a $5.0 million decrease associated with nonrecurring disbursements made to invalid vendors.