Goodwill & Intangible Assets

12 Months Ended

Dec. 31, 2015

Goodwill & Intangible Assets [Abstract]

6. GOODWILL & INTANGIBLE ASSETS

The following table summarizes the goodwill and identifiable intangible assets as of December 31, 2015 and 2014:



	December 31, 2015								December 31, 2014
	Gross Carrying Amount			Accumulated Amortization			Net Carrying Amount		Gross Carrying Amount			Accumulated Amortization			Net Carrying Amount

	(in thousands)
Capitalized software	$	162,700	(1)	$	(82,596)	(2)	$	80,104	$	157,615	(1)	$	(62,591)	(2)	$	95,024
Customer relationships		4,016			(4,016)			-		5,945			(5,798)			147
Patents, copyrights, and trademarks		6,892			(5,135)			1,757		6,702			(4,931)			1,771
Core technology (3)		3,498			(3,498)			-		4,170			(4,170)			-
Other		776			(637)			139		698			(636)			62
Total finite lived intangible assets		177,882			(95,882)			82,000		175,130			(78,126)			97,004
Indefinite lived intangible assets (3)		297			-			297		333			-			333
Goodwill (3)		1,973			-			1,973		2,044			-			2,044
Goodwill and intangible assets	$	180,152		$	(95,882)		$	84,270	$	177,507		$	(78,126)		$	99,381

(1)

Includes $4.1 million of software held under a capital lease classified as capitalized software as of each of December 31, 2015 and 2014. During 2013, Crocs began an implementation of a new enterprise resource planning, (“ERP”) system, which was placed into service in 2015. As of December 31, 2015 and 2014, Crocs capitalized $4.1 million and $36.1 million, respectively, for costs associated with the development of and added functionality to the ERP system.

(2)

Includes $3.1 million and $2.5 million of accumulated amortization of software held under a capital lease as of December 31, 2015 and 2014, respectively, which is amortized using the straight-line method over the useful life.

(3)

Changes in core technology, goodwill, and indefinite lived intangible assets relate entirely to the impact of foreign currency translation.

During the years ended December 31, 2015, 2014, and 2013, amortization expense recorded for intangible assets with finite lives was $19.7 million, $14.2 million and $17.2 million, respectively, of which $5.8 million, $4.9 million and $6.0 million, respectively, was recorded in ‘Cost of sales’, with the remaining amounts recorded in ‘Selling, general and administrative expenses’ on the consolidated statements of operations.

The following table summarizes estimated future annual amortization of intangible assets as of December 31, 2015:



	Amortization
Fiscal years ending December 31,	(in thousands)
2016	$	18,100
2017		16,397
2018		14,513
2019		12,983
2020		10,483
Thereafter		9,524
Total	$	82,000

Goodwill Impairment

Crocs assesses goodwill for impairment at the reporting unit level on an annual basis on the last day of the year, or more frequently if events and circumstances indicate impairment may have occurred. If the carrying value of the goodwill exceeds its implied fair value, Crocs records an impairment loss equal to the difference. During the years ended December 31, 2015 and 2014, Crocs did not record any impairments related to goodwill. During the year ended December 31, 2013, Crocs recorded $0.3 million of goodwill impairment related to the retail channel of the Crocs Benelux B.V. business purchased by Crocs Stores B.V. subsidiary in July 2012. Goodwill and associated impairments are part of the Europe segment.

- Definition

The entire disclosure for the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain (loss) on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss.

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