Restructuring Activities

12 Months Ended

Dec. 31, 2015

8. RESTRUCTURING ACTIVITIES

Restructuring

On July 21, 2014, Crocs announced strategic plans for long-term improvement and growth of the business. These plans comprise four key initiatives including: (1) streamlining the global product and marketing portfolio, (2) reducing direct investment in smaller geographic markets, (3) creating a more efficient organizational structure by reducing excess overhead and enhancing the decision making process, and (4) closing retail locations around the world. The initial effects of these plans were incurred in 2014 and were continued throughout 2015. During the years ended December 31, 2015 and 2014, the Company recorded restructuring charges of $8.7 million and $24.5 million, respectively. As of December 31, 2015, Crocs concluded its restructuring efforts.

The following table summarizes restructuring activity during the years ended December 31, 2015 and 2014:



	Year Ended December 31,
	2015		2014

	(in thousands)
Severance costs	$	5,472	$	12,500
Lease / contract exit and related costs		2,623		4,251
Other (1)		633		7,766
Total restructuring charges	$	8,728	$	24,517

(1)

The amounts in ‘Other’ consist of various asset and inventory impairment charges prompted by the aforementioned restructuring plan, legal fees and facility maintenance fees.

The following table summarizes the Company’s total restructuring charges incurred during the years ended December 31, 2015 and 2014 by reportable segment:



	Year Ended December 31,
	2015		2014

	(in thousands)
Americas	$	890	$	4,259
Asia Pacific		3,542		7,422
Europe		2,824		3,934
Corporate		1,472		8,902
Total restructuring charges	$	8,728	$	24,517

The following table summarizes the Company’s accrued restructuring balance and associated activity from December 31, 2014 through December 31, 2015:



	December 31, 2014		Additions		Cash Payments		Adjustments (2)		December 31, 2015

	(in thousands)
Severance costs	$	3,154	$	5,472	$	(8,000)	$		$	626
Lease/ contract exit and related costs		1,401		2,623		(3,807)		(217)		-
Other (1)		304		633		(595)				342
Total accrued restructuring	$	4,859	$	8,728	$	(12,402)	$	(217)	$	968

(1)

Includes expenses related to exiting stores and legal fees.

(2)

Represents reversal of prior year accrual as a result of subleasing an exited facility at a better than anticipated rate.

As of December 31, 2015 and 2014, Crocs had a liability of approximately $1.0 million and $4.9 million, respectively, related to locations already closed and reductions in workforce in accrued restructuring on the consolidated balance sheet.