Operating Segments and Geographic Information |
OPERATING SEGMENTS AND GEOGRAPHIC INFORMATION The Company has three reportable operating segments based on the geographic nature of our operations: Americas, Asia Pacific, and Europe. We also have an 'Other businesses' category which aggregates insignificant operating segments that do not meet the reportable segment threshold, including manufacturing operations located in Mexico and Italy, and corporate operations. Each of the reportable operating segments derives its revenues from the sale of footwear and accessories to external customers as well as inter-segment sales. Revenues of the Other businesses category are primarily made up of inter-segment sales. The remaining revenues for 'Other businesses' represent non-footwear product sales to external customers. Inter-segment sales are not included in the measurement of segment operating income and are eliminated when reporting 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 inter-segment sales. As such, reconciling items for segment operating income represent unallocated corporate and other expenses as well as inter-segment eliminations. | | | | | | | | | | | | | | Year Ended December 31, | | 2016 | | 2015 | | 2014 | | (in thousands) | Revenues: | | | | | |
| Americas | $ | 467,006 |
| | $ | 476,210 |
| | $ | 489,915 |
| Asia Pacific | 395,078 |
| | 424,491 |
| | 473,910 |
| Europe | 173,444 |
| | 188,833 |
| | 233,604 |
| Total segment revenues | 1,035,528 |
| | 1,089,534 |
| | 1,197,429 |
| Other businesses | 745 |
| | 1,096 |
| | 794 |
| Total consolidated revenues | $ | 1,036,273 |
| | $ | 1,090,630 |
| | $ | 1,198,223 |
| Operating income: | | | | | | Americas (1) | $ | 58,844 |
| | $ | 49,422 |
| | $ | 48,347 |
| Asia Pacific (2) | 78,907 |
| | 48,447 |
| | 75,135 |
| Europe (3) | 17,757 |
| | 15,629 |
| | 24,517 |
| Total segment operating income | 155,508 |
| | 113,498 |
| | 147,999 |
| Reconciliation of total segment operating income to income before income taxes: | |
| | |
| | |
| Other businesses | (26,935 | ) | | (30,092 | ) | | (19,400 | ) | Intersegment eliminations | — |
| | — |
| | (1,498 | ) | Unallocated corporate and other(4) | (134,727 | ) | | (155,730 | ) | | (131,827 | ) | Total consolidated operating income (loss) | (6,154 | ) | | (72,324 | ) | | (4,726 | ) | Foreign currency transaction loss, net | (2,454 | ) | | (3,332 | ) | | (4,885 | ) | Interest income | 692 |
| | 967 |
| | 1,664 |
| Interest expense | (836 | ) | | (969 | ) | | (806 | ) | Other income (expense), net | 1,539 |
| | 914 |
| | 204 |
| Income (loss) before income taxes | $ | (7,213 | ) | | $ | (74,744 | ) | | $ | (8,549 | ) | Depreciation and amortization: | |
| | |
| | |
| Americas | $ | 5,787 |
| | $ | 7,401 |
| | $ | 11,670 |
| Asia Pacific | 4,264 |
| | 3,913 |
| | 6,724 |
| Europe | 2,133 |
| | 2,229 |
| | 3,761 |
| Total segment depreciation and amortization | 12,184 |
| | 13,543 |
| | 22,155 |
| Other businesses | 6,830 |
| | 7,634 |
| | 5,900 |
| Unallocated corporate and other(4) | 15,029 |
| | 14,816 |
| | 9,358 |
| Total consolidated depreciation and amortization | $ | 34,043 |
| | $ | 35,993 |
| | $ | 37,413 |
| Cash paid for Property Plant and Equipment | | | | | | Americas | $ | 6,851 |
| | $ | 6,611 |
| | $ | 6,807 |
| Europe | 1,388 |
| | 1,510 |
| | 3,061 |
| Asia Pacific | 4,994 |
| | 4,705 |
| | 6,123 |
| Total cash paid for Property Plant and Equipment | $ | 13,233 |
| | $ | 12,826 |
| | $ | 15,991 |
| Cash paid for Intangible Assets | | | | | | Americas | $ | 8,961 |
| | $ | 5,459 |
| | $ | 40,532 |
|
| | | | | | | | | | | | | Europe | — |
| | 201 |
| | 208 |
| Asia | — |
| | — |
| | 295 |
| Total cash paid for Intangible Assets | $ | 8,961 |
| | $ | 5,660 |
| | $ | 41,035 |
|
_______________________________________________________________________________ | | (1) | Includes $1.7 million, $7.2 million, and $4.0 million for the years ended December 31, 2016, 2015, and 2014 respectively, of asset impairment charges related to 12, 27, and 36 underperforming retail locations, respectively. |
| | (2) | Includes $0.7 million, $0.7 million, and $2.8 million for the years ended December 31, 2016, 2015, and 2014, respectively, of asset impairment charges related to 21, 27, and 14 underperforming retail locations, respectively. Additionally in the year ended December 31, 2015, the company recorded $5.7 million in impairment charges related to South Africa assets, pertaining to 9 retail locations, classified as available for sale. |
| | (3) | Includes $0.3 million, $1.6 million, and $2.0 million for the years ended December 31, 2016, 2015, and 2014 of asset impairment charges related to 9, 21, and 27 underperforming retail locations. Additionally in the year ended December 31, 2016, the Company recorded $0.4 million in impairment charges related to goodwill in our European retail business. |
| | (4) | Includes a corporate component consisting primarily of corporate support and administrative functions, costs associated with share-based compensation, research and development, marketing, legal, restructuring, depreciation and amortization of corporate and other assets not allocated to operating segments, and similar costs of certain corporate holding companies. |
The following table sets forth asset information related to reportable operating segments: | | | | | | | | | | December 31, | | 2016 | | 2015 | | (in thousands) | Assets (1) | |
| | |
| Americas | $ | 128,071 |
| | $ | 148,104 |
| Asia Pacific | 144,037 |
| | 169,865 |
| Europe | 69,306 |
| | 46,137 |
| Total segment current assets | 341,414 |
| | 364,106 |
| Supply Chain | 12,343 |
| | 14,778 |
| Corporate(2) | 19,134 |
| | 16,265 |
| Income tax receivable | 2,995 |
| | 10,233 |
| Other receivables | 14,642 |
| | 14,233 |
| Restricted cash - current | 2,534 |
| | 2,554 |
| Prepaid expenses and other current assets | 32,413 |
| | 23,780 |
| Total current assets | 425,475 |
| | 445,949 |
| Property and Equipment, net | 44,090 |
| | 49,490 |
| Intangible assets, net | 72,700 |
| | 82,297 |
| Goodwill | 1,480 |
| | 1,973 |
| Deferred tax assets, net | 6,825 |
| | 6,608 |
| Restricted cash | 2,547 |
| | 3,551 |
| Other assets | 13,273 |
| | 18,152 |
| Total consolidated assets | $ | 566,390 |
| | $ | 608,020 |
|
_______________________________________________________________________________ | | (1) | Assets by segment include cash and equivalents, net accounts receivable, and inventory. |
| | (2) | Corporate assets primarily consist of cash and equivalents and inventory. |
There were no customers who represented 10% or more of consolidated revenues during the years ended December 31, 2016, 2015 and 2014. The following table sets forth certain geographical information regarding Crocs' revenues during the years ended December 31, 2016, 2015 and 2014: | | | | | | | | | | | | | | Year Ended December 31, | | 2016 | | 2015 | | 2014 | | (in thousands) | Location | |
| | |
| | |
| United States | $ | 384,939 |
| | $ | 392,463 |
| | $ | 435,154 |
| International(1) | 651,334 |
| | 698,167 |
| | 763,069 |
| Total revenues | $ | 1,036,273 |
| | $ | 1,090,630 |
| | $ | 1,198,223 |
|
_______________________________________________________________________________ | | (1) | For the years ended December 31, 2015 and 2014, no individual country represented more than 10% of consolidated revenues. For the year ended December 31, 2016, sales in Japan represented 10.6% of consolidated revenues. |
The following table sets forth geographical information regarding property and equipment assets: | | | | | | | | | | December 31, | | 2016 | | 2015 | | (in thousands) | Location | |
| | |
| United States | $ | 29,420 |
| | $ | 32,954 |
| International | 14,670 |
| | 16,536 |
| Total long-lived assets | $ | 44,090 |
| | $ | 49,490 |
|
Not more than 10% of long-lived assets resided in any individual foreign country in 2016 or 2015.
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