10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

xQUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2014

or

oTRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from         to       

Commission File No. 000-51754

CROCS, INC.

(Exact name of registrant as specified in its charter)

Delaware
(State or other jurisdiction of
incorporation or organization) 20-2164234
(I.R.S. Employer
Identification No.)

7477 East Dry Creek Parkway, Niwot, Colorado 80503

(Address, including zip code, of registrant’s principal executive offices)

(303) 848-7000

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x   No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes  x   No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer x	Accelerated filer o
Non-accelerated filer o (do not check if a smaller reporting company)	Smaller reporting company o

Indicate by check mark whether the registrant is shell company (as defined in Rule 12b-2 of the Act). Yes o   No x

As of April 25, 2014, Crocs, Inc. had 87,532,602 shares of its $0.001 par value common stock outstanding.

Special Note Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. In addition, we may make other written and oral communications from time to time that contain such statements. Forward-looking statements include statements as to industry trends, our future expectations and other matters that do not relate strictly to historical facts and are based on certain assumptions of our management. These statements, which express management’s current views concerning future events or results, use words like “anticipate,” “assume,” “ believe,” “continue,” “estimate,” “expect,” “future,” “intend,” “plan,” “project,” “strive,” and future or conditional tense verbs like “could,” “may,” “might,” “should,” “will,” “would” and similar expressions or variations. Forward-looking statements are subject to risks, uncertainties and other factors which may cause actual results to differ materially from future results expressed or implied by such forward-looking statements. Important factors that could cause actual results to differ materially from the forward-looking statements include, without limitation, those described in the section entitled “Risk Factors” under Item 1A in our Annual Report on Form 10-K for the year ended December 31, 2013 and subsequent filings with the Securities and Exchange Commission. Moreover, such forward-looking statements speak only as of the date of this report. We undertake no obligation to update any forward-looking statements to reflect events or circumstances after the date of such statements.

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Crocs, Inc.

Form 10-Q

Quarter Ended March 31, 2014

Table of Contents

PART I — Financial Information
Item 1.	Financial Statements	1
	Unaudited Condensed Consolidated Statements of Income for the Three Months Ended March 31, 2014 and 2013	1
	Unaudited Condensed Consolidated Statements of Comprehensive Income for the Three Months Ended March 31, 2014 and 2013	2
	Unaudited Condensed Consolidated Balance Sheets at March 31, 2014 and December 31, 2013	3
	Unaudited Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2014 and 2013	4
	Notes to Unaudited Condensed Consolidated Financial Statements	5
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	20
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	35
Item 4.	Controls and Procedures	37
PART II — Other Information
Item 1.	Legal Proceedings	38
Item 1A.	Risk Factors	39
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	39
Item 6.	Exhibits	40
Signatures		41

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PART I — Financial Information

ITEM 1. Financial Statements

CROCS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

	Three Months Ended
	March 31,
($ thousands, except per share data)	2014			2013
Revenues	$	312,429		$	311,656
Cost of sales	156,202			145,807
Gross profit	156,227			165,849
Selling, general and administrative expenses	139,405			128,199
Income from operations	16,822			37,650
Foreign currency transaction losses, net	2,768			2,600
Interest income	(477		)	(306		)
Interest expense	191			209
Other income, net	(141		)	(28		)
Income before income taxes	14,481			35,175
Income tax expense	5,357			6,214
Net income	9,124			28,961
Dividends on Series A convertible preferred shares	2,133			—
Dividend equivalents on Series A convertible preferred shares related to redemption value accretion and beneficial conversion feature	618			—
Net income attributable to common stockholders	$	6,373		$	28,961
Net income per common share (Note 11):
Basic	$	0.06		$	0.33
Diluted	$	0.06		$	0.33

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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CROCS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

	Three Months Ended
	March 31,
($ thousands)	2014			2013
Net income	$	9,124		$	28,961
Other comprehensive income (loss):
Foreign currency translation	(980		)	(4,317		)
Reclassification of cumulative foreign exchange translation adjustments to net income, net of tax of $0 and $(3), respectively	—			299
Total comprehensive income	$	8,144		$	24,943

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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CROCS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

	March 31,			December 31,
($ thousands, except number of shares)	2014			2013
ASSETS
Current assets:
Cash and cash equivalents	$	411,806		$	317,144
Accounts receivable, net of allowances of $14,513 and $10,513, respectively	206,213			104,405
Inventories	192,376			162,341
Deferred tax assets, net	4,521			4,440
Income tax receivable	14,004			10,630
Other receivables	17,025			11,942
Prepaid expenses and other current assets	34,559			29,175
Total current assets	880,504			640,077
Property and equipment, net	86,413			86,971
Intangible assets, net	81,415			74,822
Deferred tax assets, net	19,688			19,628
Other assets	40,930			53,661
Total assets	$	1,108,950		$	875,159
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	89,130		$	57,450
Accrued expenses and other current liabilities	119,127			97,111
Deferred tax liabilities, net	11,193			11,199
Income taxes payable	16,924			15,992
Current portion of long-term borrowings and capital lease obligations	5,192			5,176
Total current liabilities	241,566			186,928
Long term income tax payable	36,508			36,616
Long-term borrowings and capital lease obligations	10,359			11,670
Other liabilities	15,934			15,201
Total liabilities	304,367			250,415
Commitments and contingencies (Note 13)
Series A convertible preferred shares, par value $0.001 per share, 200,000 shares issued and outstanding, redemption amount and liquidation preference of $202,133 and $0 at March 31, 2014 and December 31, 2013, respectively (Note 12)	182,838			—
Stockholders’ equity:
Preferred shares, par value $0.001 per share, 5,000,000 shares authorized, none outstanding	—			—
Common shares, par value $0.001 per share, 250,000,000 shares authorized, 91,987,136 and 87,888,964 shares issued and outstanding, respectively, at March 31, 2014 and 91,662,656 and 88,450,203 shares issued and outstanding, respectively, at December 31, 2013	92			92
Treasury stock, at cost, 4,098,172 and 3,212,453 shares, respectively	(68,265		)	(55,964		)
Additional paid-in capital	325,441			321,532
Retained earnings	350,805			344,432
Accumulated other comprehensive income	13,672			14,652
Total stockholders’ equity	621,745			624,744
Total liabilities, commitments and contingencies and stockholders’ equity	$	1,108,950		$	875,159

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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CROCS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	Three Months Ended March 31,
($ thousands)	2014			2013
Cash flows from operating activities:
Net income	$	9,124		$	28,961
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	9,373			10,264
Unrealized (gain) loss on foreign exchange, net	(5,708		)	2,982
Provision for doubtful accounts, net	768			697
Share-based compensation	4,621			3,540
Other non-cash items	49			419
Changes in operating assets and liabilities:
Accounts receivable	(103,188		)	(87,946		)
Inventories	(30,484		)	(16,055		)
Prepaid expenses and other assets	2,514			(4,354		)
Accounts payable	31,675			21,488
Accrued expenses and other liabilities	20,943			5,841
Income taxes	(2,425		)	(443		)
Cash used in operating activities	(62,738		)	(34,606		)
Cash flows from investing activities:
Cash paid for purchases of property and equipment	(5,089		)	(9,889		)
Proceeds from disposal of property and equipment	—			515
Cash paid for intangible assets	(10,247		)	(5,745		)
Restricted cash	(583		)	(1,279		)
Cash used in investing activities	(15,919		)	(16,398		)
Cash flows from financing activities:
Proceeds from preferred stock offering, net of issuance costs of $15.8 million and $0.0 million, respectively	182,220			—
Proceeds from bank borrowings	—			12,173
Repayment of bank borrowings and capital lease obligations	(1,295		)	(9,504		)
Issuances of common stock	518			603
Purchase of treasury stock	(13,031		)	(12,661		)
Repurchase of common stock for tax withholding	(669		)	—
Cash provided by (used in) financing activities	167,743			(9,389		)
Effect of exchange rate changes on cash	5,576			(1,282		)
Net increase in cash and cash equivalents	94,662			(61,675		)
Cash and cash equivalents—beginning of period	317,144			294,348
Cash and cash equivalents—end of period	$	411,806		$	232,673
Supplemental disclosure of cash flow information—cash paid during the period for:
Interest	$	152		$	499
Income taxes	$	7,213		$	5,872
Supplemental disclosure of non-cash investing and financing activities:
Assets acquired under capitalized leases	$	—		$	61
Accrued purchases of property and equipment	1,612			2,380
Accrued purchases of intangibles	5,088			768
Accrued dividends	2,133			—
Accretion of dividend equivalents	$	618		$	—

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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CROCS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1. GENERAL

Organization

Crocs, Inc. and its subsidiaries (collectively the “Company,” “we,” “our” or “us”) are engaged in the design, development, manufacturing, marketing and distribution of footwear, apparel and accessories for men, women and children.

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and with the rules and regulations of the Securities and Exchange Commission (“SEC”) for reporting on Form 10-Q. The condensed consolidated balance sheet as of December 31, 2013 was derived from the Company’s Annual Report on Form 10-K for the year ended December 31, 2013 (the “2013 Form 10-K”). Accordingly, these statements do not include all of the information and disclosures required by GAAP or SEC rules and regulations for complete financial statements. In the opinion of management, these financial statements reflect all adjustments (consisting solely of normal recurring matters) considered necessary for a fair presentation of the results for the interim periods presented. The results of operations for any interim period are not necessarily indicative of results for the full year.

Summary of Significant Accounting Policies

These statements should be read in conjunction with the consolidated financial statements and footnotes included in the 2013 Form 10-K. The accounting policies used in preparing these unaudited condensed consolidated financial statements are the same as those described in Note 1 — Organization & Summary of Significant Accounting Policies to the consolidated financial statements in the 2013 Form 10-K.

Earnings Per Share - Basic and diluted earnings per common share (“EPS”) is presented using the two-class method, which is an earnings allocation formula that determines earnings per share for common stock and any participating securities according to dividend rights and participation rights in undistributed earnings. Under the two-class method, EPS is computed by dividing the sum of distributed and undistributed earnings attributable to common stockholders by the weighted average number of shares of common stock outstanding during the period. A participating security is a security that may participate in undistributed earnings with common stock had those earnings been distributed in any form. Our recently issued Series A Convertible Preferred Stock (“Series A preferred stock”) represent participating securities as holders of the Series A preferred stock are entitled to receive any and all dividends declared or paid on common stock on an as-converted basis. In addition, shares of our non-vested restricted stock awards are considered participating securities as they represent unvested share-based payment awards containing non-forfeitable rights to dividends. As such, these participating securities must be included in the computation of EPS pursuant to the two-class method on a pro-rata, as-converted basis. Diluted EPS reflects the potential dilution from securities that could share in our earnings. In addition, the dilutive effect of each participating security is calculated using the more dilutive of the two-class method described above, which assumes that the securities remain in their current form, or the if-converted method, which assumes conversion to common stock as of the beginning of the reporting date. Anti-dilutive securities are excluded from diluted EPS. See Note 11—Earnings Per Share for further discussion.

Recently Adopted Accounting Standards

In July 2013, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2013-11 Income Taxes (Topic 740): Presentation of an Unrecognized Tax Benefit when a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists (“ASU No. 2013-11”). This pronouncement provides guidance on financial statement presentation of an unrecognized tax benefit (“UTB”) when a net operating loss (“NOL”) carryforward, a similar tax loss or a tax credit carryforward exists. Under the pronouncement, an entity must present a UTB, or a portion of the UTB, in the financial statements as a reduction to a deferred tax asset (“DTA”) for an NOL carryforward, a similar tax loss or a tax credit carryforward except when:

1) An NOL carryforward, a similar tax loss or a tax credit carryforward is not available as of the reporting date under the governing tax law to settle that would result from the disallowance of the tax position.

2) The entity does not intend to use the DTA for this purpose (provided that the tax law permits a choice).

If either of these conditions exists, an entity should present a UTB in the financial statements as a liability and should not net the UTB with a DTA. This amendment does not affect the amounts disclosed in the tabular reconciliation of the total amounts of UTBs because

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the tabular reconciliation presents gross amounts of UTBs. This pronouncement is effective for fiscal years and interim periods within those fiscal years beginning after December 15, 2013. The Company adopted this pronouncement on January 1, 2014. The adoption of this pronouncement did not have a material impact to the Company’s consolidated financial position or results of operations.

2. INVENTORIES

The following table summarizes inventories by major classification as of March 31, 2014 and December 31, 2013:

($ thousands)	March 31, 2014		December 31, 2013
Finished goods	$	185,563	$	154,272
Work-in-progress	491		685
Raw materials	6,322		7,384
Inventories	$	192,376	$	162,341

3. PROPERTY & EQUIPMENT

The following table summarizes property and equipment by major classification as of March 31, 2014 and December 31, 2013:

	March 31,			December 31,
($ thousands)	2014			2013
Machinery and equipment	$	52,843		$	52,003
Leasehold improvements	101,761			93,235
Furniture, fixtures and other	25,756			23,653
Construction-in-progress	8,915			16,231
Property and equipment, gross (1)	189,275			185,122
Less: Accumulated depreciation (2)	(102,862		)	(98,151		)
Property and equipment, net	$	86,413		$	86,971

(1)Includes $0.1 million and $0.1 million of certain equipment held under capital leases and classified as equipment as of March 31, 2014 and December 31, 2013, respectively.

(2)Includes $0.1 million and $0.1 million of accumulated depreciation related to certain equipment held under capital leases as of March 31, 2014 and December 31, 2013, respectively, which are depreciated using the straight-line method over the lease term.

During the three months ended March 31, 2014 and 2013, we recorded $5.4 million and $6.1 million, respectively, in depreciation expense of which $0.5 million and $0.8 million, respectively, was recorded in ‘Cost of sales’, with the remaining amounts recorded in ‘Selling, general and administrative expenses’ in the condensed consolidated statements of income.

Asset Impairments

We periodically evaluate all of our long-lived assets for impairment when events or circumstances would indicate the carrying value of a long-lived asset may not be fully recoverable. During the three months ended March 31, 2014 and 2013, we recorded no charges related to asset impairments.

Retail Store Closings

During the three months ended March 31, 2014, we closed two retail locations in our Europe segment which were not scheduled to close until future periods and were selected for closure by management based on historical and projected profitability levels, relocation plans, and other factors. As of March 31, 2014, we recorded a liability of approximately $0.7 million related to these locations in ‘Accrued expenses and other current liabilities’ on the condensed consolidated balance sheets with a related expense in ‘Selling, general and administrative expenses’ on the condensed consolidated statements of income. The calculation of accrued store closing reserves primarily includes future minimum lease payments from the date of closure to the end of the remaining lease term, net of contractual or estimated sublease income. We record the liability at fair value in the period in which the store is closed.

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4. GOODWILL & INTANGIBLE ASSETS

The following table summarizes the goodwill and identifiable intangible assets as of March 31, 2014 and December 31, 2013:

	March 31, 2014								December 31, 2013
($ thousands)	Gross Carrying  Amount			Accumulated  Amortization			Net Carrying  Amount		Gross Carrying Amount			Accumulated  Amortization			Net Carrying  Amount
Capitalized software	$	129,013	(1)	$	(53,051	)(2)	$	75,962	$	118,940	(1)	$	(49,665	)(2)	$	69,275
Customer relationships	6,781			(6,437		)	344		6,878			(6,439		)	439
Patents, copyrights, and trademarks	6,626			(4,462		)	2,164		6,501			(4,272		)	2,229
Core technology	4,378			(4,378		)	—		4,548			(4,548		)	—
Other	981			(636		)	345		983			(709		)	274
Total finite lived intangible assets	147,779			(68,964		)	78,815		137,850			(65,633		)	72,217
Indefinite lived intangible assets	101			—			101		97			—			97
Goodwill	2,499			—			2,499		2,508			—			2,508
Intangible assets	$	150,379		$	(68,964	)	$	81,415	$	140,455		$	(65,633	)	$	74,822

(1)Includes $4.1 million of software held under a capital lease classified as capitalized software as of March 31, 2014 and December 31, 2013.

(2)Includes $2.1 million and $1.9 million of accumulated amortization of software held under a capital lease as of March 31, 2014 and December 31, 2013, respectively, which is amortized using the straight-line method over the useful life.

During the three months ended March 31, 2014 and 2013, amortization expense recorded for intangible assets with finite lives was $4.0 million and $4.2 million, respectively, of which $1.3 million and $1.6 million, respectively, was recorded in ‘Cost of sales’, with the remaining amounts recorded in ‘Selling, general and administrative expenses’ in the condensed consolidated statements of income.

The following table summarizes estimated future annual amortization of intangible assets as of March 31, 2014:

	Amortization
Fiscal years ending December 31,	($ thousands)
Remainder of 2014	$	10,108
2015	14,717
2016	14,285
2017	11,663
2018	9,702
Thereafter	18,340
Total	$	78,815

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5. ACCRUED EXPENSES & OTHER CURRENT LIABILITIES

The following table summarizes accrued expenses and other current liabilities as of March 31, 2014 and December 31, 2013:

	March 31,		December 31,
($ thousands)	2014		2013
Accrued compensation and benefits	$	26,559	$	26,903
Professional services	19,824		14,128
Fulfillment, freight and duties	15,489		12,565
Sales/use and VAT tax payable	14,393		9,142
Accrued rent and occupancy	11,850		12,198
Accrued legal	10,296		8,722
Customer deposits	7,043		6,940
Dividend payable	2,133		—
Other (1)	11,540		6,513
Total accrued expenses and other current liabilities	$	119,127	$	97,111

(1)The amounts in ‘Other’ consist of various accrued expenses and no individual item accounted for more than 5% of the total balance at March 31, 2014 or December 31, 2013.

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6. FAIR VALUE MEASUREMENTS

Recurring Fair Value Measurements

The following tables summarize the financial instruments required to be measured at fair value on a recurring basis as of March 31, 2014 and December 31, 2013:

	Fair Value as of March 31, 2014
	Quoted prices in		Significant
	active markets		other		Significant
	for identical		observable		unobservable
	assets or liabilities		inputs		inputs
($ thousands)	(Level 1)		(Level 2)		(Level 3)		Total		Balance Sheet Classification
Cash equivalents	$	118,871	$	—	$	—	$	118,871	Cash and cash equivalents and other current assets

	Fair Value as of December 31, 2013
	Quoted prices in		Significant
	active markets		other		Significant
	for identical		observable		unobservable
	assets or liabilities		inputs		inputs
($ thousands)	(Level 1)		(Level 2)		(Level 3)		Total		Balance Sheet Classification
Cash equivalents	$	37,870	$	—	$	—	$	37,870	Cash and cash equivalents and other current assets
Derivative assets:
Foreign currency contracts	—		13,501		—		13,501		Prepaid expenses and other current assets and other assets
Derivative liabilities:
Foreign currency contracts	$	—	$	984	$	—	$	984	Accrued expense and other current liabilities

Non-Recurring Fair Value Measurements

The majority of our non-financial instrument assets, which include inventories, property and equipment and intangible assets, are not required to be carried at fair value on a recurring basis. However, if certain triggering events occur such that a non-financial instrument is required to be evaluated for impairment and the carrying value is not recoverable, the carrying value would be adjusted to the lower of its cost or fair value and an impairment charge would be recorded.

7. DERIVATIVE FINANCIAL INSTRUMENTS

We transact business in various foreign countries and are therefore exposed to foreign currency exchange rate risk inherent in revenues, costs, and monetary assets and liabilities denominated in non-functional currencies. We have entered into foreign currency exchange forward contracts and currency swap derivative instruments to selectively protect against volatility in the value of non-functional currency denominated monetary assets and liabilities, and of future cash flows caused by changes in foreign currency exchange rates. We do not designate these derivative instruments as hedging instruments under the accounting standards for derivatives and hedging. Accordingly, these instruments are recorded at fair value as a derivative asset or liability on the balance sheet with their corresponding change in fair value recognized in ‘Foreign currency transaction (gains) losses, net’ in our condensed consolidated statements of income. For purposes of the condensed consolidated statement of cash flows, we classify the cash flows at settlement from undesignated instruments in the same category as the cash flows from the related hedged items, generally within ‘Cash provided by (used in) operating activities’. See Note 6 — Fair Value Measurements for further details regarding the fair values of the corresponding derivative assets and liabilities. As of March 31, 2014, we did not have derivative assets or liabilities on our condensed consolidated balance sheets as all derivative forward contracts described in the table below were entered into on March 31, 2014.

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The following table summarizes the notional amounts of the outstanding foreign currency exchange contracts at March 31, 2014 and December 31, 2013. The notional amounts of the derivative financial instruments shown below are denominated in their United States (“U.S.”) Dollar equivalents and represent the amount of all contracts of the foreign currency specified. These notional values do not necessarily represent amounts exchanged by the parties and, therefore, are not a direct measure of our exposure to the foreign currency exchange risks.

	March 31,		December 31,
($ thousands)	2014		2013
Foreign currency exchange forward contracts by currency:
Japanese Yen	$	67,413	$	68,707
Euro	52,850		38,577
Russian Ruble	38,754		17,588
British Pound Sterling	36,702		15,487
South Korean Won	34,867		12,100
Singapore Dollar	25,200		28,225
Mexican Peso	18,125		18,350
Australian Dollar	12,689		4,941
New Taiwan Dollar	8,779		3,463
South African Rand	7,746		3,076
Indian Rupee	5,525		2,150
Canadian Dollar	4,972		3,428
Hong Kong Dollar	3,533		1,844
New Zealand Dollar	2,468		943
Swedish Krona	2,222		1,615
Norwegian Krone	388		—
Total notional value, net	$	322,233	$	220,494
Latest maturity date	May 2014		December 2015

The following table presents the amounts affecting the condensed consolidated statements of income from derivative instruments for the three months ended March 31, 2014 and 2013:

	Three Months Ended March 31,					Location of (Gain) Loss Recognized in Income on
($ thousands)	2014		2013			Derivatives
Foreign currency exchange forwards	$	1,838	$	(9,941	)	Foreign currency transaction (gains) losses, net

The account ‘Foreign currency transaction gains (losses), net’ on the condensed consolidated statements of income includes both realized and unrealized gains/losses from underlying foreign currency activity and derivative contracts. These gains and losses are reported on a net basis. For the three months ended March 31, 2014, the net loss recognized of $2.8 million recorded on the condensed consolidated statements of income is comprised of a $1.8 million net loss associated with our derivative instruments and a $1.0 million net loss associated with exposure from day-to-day business transactions in various foreign currencies. For the three months ended March 31, 2013, the net loss recognized of $2.6 million recorded on the condensed consolidated statements of income is comprised of a $12.5 million net loss associated with exposure from day-to-day business transactions in various foreign currencies partially offset by a $9.9 million net gain associated with our derivative instruments.

8. REVOLVING CREDIT FACILITY & BANK BORROWINGS

Revolving Credit Facility

On December 16, 2011, we entered into an Amended and Restated Credit Agreement, (as amended, the “Credit Agreement”) with the lenders named therein and PNC Bank, National Association (“PNC”), as a lender and administrative agent for the lenders.

On March 27, 2014, we entered into the Fourth Amendment to Amended and Restated Credit Agreement (the “Fourth Amendment”), pursuant to which certain terms of the Credit Agreement were amended. The Fourth Amendment primarily (i) alters the minimum fixed charge coverage ratio from 1.25 to 1.00 to a scaled quarterly ratio of 1.15 to 1.00 in the first and second quarters of 2014, 1.20 to

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1.00 in the third and fourth quarters of 2014 and 1.25 to 1.00 at the end of each quarter thereafter, and (ii) amends certain definitions of the financial covenants to become more favorable to us.

As of March 31, 2014 and December 31, 2013, we had no outstanding borrowings under the Credit Agreement. As of March 31, 2014 and December 31, 2013, we had issued and outstanding letters of credit of $7.3 million and $7.2 million, respectively, which were reserved against the borrowing base under the terms of the Credit Agreement. As of March 31, 2014, we were in compliance with all restrictive financial covenants under the Credit Agreement.

Long-term Bank Borrowings

On December 10, 2012, we entered into a Master Installment Payment Agreement (“Master IPA”) with PNC in which PNC finances our purchase of software and services, which may include but are not limited to third party costs to design, install and implement software systems, and associated hardware described in the schedules defined within the Master IPA. The Master IPA was entered into to finance our implementation of a new enterprise resource planning (“ERP”) system which began in October 2012 and is estimated to continue through late 2014. The terms of each note payable under the Master IPA consist of variable interest rates and payment terms based on amounts borrowed and timing of activity throughout the implementation of the ERP system.

As of March 31, 2014 and December 31, 2013, we had $15.5 million and $16.8 million, respectively, of long-term debt outstanding under five separate notes payable under the Master IPA, of which $5.2 million and $5.1 million, respectively, represent current installments. As of March 31, 2014, the notes bear interest rates ranging from 2.45% to 2.79% and maturities ranging from September 2016 to September 2017. As this debt arrangement relates solely to the construction and implementation of an ERP system for use by the entity, all interest expense incurred under the arrangement has been capitalized to the condensed consolidated balance sheets until the assets are ready for intended use and will be amortized over the useful life of the software upon that date. During the three months ended March 31, 2014 and 2013, we capitalized $0.1 million and $0.0 million, respectively, in interest expense related to this debt arrangement to the condensed consolidated balance sheets.

The aggregate maturities of long-term bank borrowings at March 31, 2014 are as follows (in thousands):

Fiscal years ending December 31,
Remainder of 2014	$	5,169
2015	5,305
2016	4,150
2017	885
2018	—
Thereafter	—
Total principal debt maturities	$	15,509

9. STOCK-BASED COMPENSATION

Stock-based compensation expense is recognized on a straight-line basis over the applicable vesting period. During the three months ended March 31, 2014 and 2013, $4.7 million and $3.5 million, respectively, of stock-based compensation expense was recorded, of which $0.1 million and $0.2 million, respectively, related to the implementation of our ERP system was capitalized to intangible assets.

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Stock Options

Options granted generally vest over four years with the first year vesting on a cliff basis followed by monthly vesting for the remaining three years.

The following table summarizes the stock option activity for the three months ended March 31, 2014 and 2013:

	Three Months Ended March 31,
	2014				2013
Options	Options		Weighted Average Exercise Price		Options		Weighted Average Exercise Price
Outstanding at December 31, 2013 and 2012, respectively	2,105,152		$	13.34	2,621,686		$	13.03
Granted	24,000		15.33		79,500		15.29
Exercised	(73,557	)	7.05		(97,309	)	6.20
Forfeited or expired	(35,287	)	18.07		(63,200	)	18.48
Outstanding at March 31	2,020,308		$	13.51	2,540,677		$	13.24

Restricted Stock Awards and Units

From time to time, we grant restricted stock awards (“RSA”) and restricted stock units (“RSU”) to our employees. RSAs and RSUs generally vest over three or four years depending on the terms of the grant. Unvested RSAs have the same rights as those of common shares including voting rights and non-forfeitable dividend rights. However, ownership of unvested RSAs cannot be transferred until they are vested. An unvested RSU is a contractual right to receive a share of common stock only upon its vesting. RSUs have dividend equivalent rights which accrue over the term of the award and are paid if and when the RSUs vest, but they have no voting rights.

We typically grant time-based RSUs and performance-based RSUs. Time-based RSUs are typically granted on an annual basis to certain non-executive employees and vest in three annual installments on a straight-line basis beginning one year after the grant date. During the three months ended March 31, 2014 and 2013, the board of directors approved grants of 0.3 million and 0.8 million, respectively, of RSUs to certain non-executives. Performance-based RSUs are typically granted on an annual basis to certain executive employees and consist of a time-based and performance-based component. During the three months ended March 31, 2104 and 2013, the board of directors approved the grant of an aggregate of 1.0 million and 0.6 million, respectively, of RSUs to certain executives as part of a performance incentive program. During the three months ended March 31, 2014 and 2013, we recorded $3.7 million and $2.7 million, respectively, of stock-based payment expense related to RSUs. The following represents the vesting schedule of performance-based RSUs granted in 2014:

	Performance Vested RSUs (50% of Award)
Time Vested RSUs(50% of Award)	Performance Goals (weighted equally)	Potential Award	Further Time Vesting
Vest in 3 annual installments beginning one year after the date of grant	Achievement of at least 70% of a one-year cumulative earnings per share performance goal. Achievement of at least 90% of 2014 revenue target.	Executive may earn from 50% to 200% of the target number of RSUs based on the level of achievement of the performance goal.	Earned RSUs vest 50% upon satisfaction of performance goal and 50% one year later.

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The following table summarizes the RSA activity for the three months ended March 31, 2014 and 2013:

	Three Months Ended March 31,
	2014				2013
Restricted Stock Awards	Shares		Weighted Average Grant Date Fair Value		Shares		Weighted Average Grant Date Fair Value
Outstanding at December 31, 2013 and 2012, respectively	210,490		$	13.43	355,509		$	13.37
Granted	—		—		—		—
Vested (1)	(15,398	)	16.68		(17,206	)	16.86
Forfeited or expired	(137,055	)	12.44		(10,800	)	12.51
Outstanding at March 31	58,037		$	14.89	327,503		$	13.22

(1)The RSAs vested during the three months ended March 31, 2014 and 2013 consisted entirely of time-based awards.

The following table summarizes the RSU activity for the three months ended March 31, 2014 and 2013:

	Three Months Ended March 31,
	2014				2013
Restricted Stock Units	Units		Weighted Average Grant Date Fair Value		Units		Weighted Average Grant Date Fair Value
Outstanding at December 31, 2013 and 2012, respectively	1,965,667		$	16.50	1,414,661		$	20.61
Granted	1,348,977		16.44		1,406,017		14.94
Vested (1)	(408,564	)	17.09		(194,687	)	21.19
Forfeited or expired	(292,526	)	18.35		(176,447	)	24.04
Outstanding at March 31	2,613,554		$	16.17	2,449,544		$	17.06

(1)The RSUs vested during the three months ended March 31, 2014 consisted of 30,946 performance-based awards and 377,618 time-based awards. The RSUs vested during the three months ended March 31, 2013 consisted of 52,288 performance-based awards and 142,399 time-based awards.

10. INCOME TAXES

During the three months ended March 31, 2014, we recognized an income tax expense of $5.4 million on pre-tax income of $14.5 million, representing an effective income tax expense rate of 37.0% compared to an income tax expense of $6.2 million on pre-tax income of $35.2 million, representing an effective income tax expense rate of 17.7% for the same period in 2013.

The increase in effective tax rate compared to the same period in 2013 is primarily the result of increased profitability in higher tax jurisdictions and losses recorded in tax jurisdictions for which no tax benefits are being recorded.  Our effective tax rates for all periods presented also differ from the federal U.S. statutory rate due to differences between income tax rates between U.S. and foreign jurisdictions. We had unrecognized tax benefits of $31.2 million at March 31, 2014 and $31.6 million at December 31, 2013.

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11. EARNINGS PER SHARE

The following table illustrates the basic and diluted EPS computations for the three months ended March 31, 2014 and 2013:

	Three Months Ended March 31,
($ thousands, except per share data)	2014			2013
Numerator
Net income attributable to common stockholders	$	6,373		$	28,961
Less: adjustment for income allocated to participating securities	(868		)	(115		)
Net income attributable to common stockholders - basic and diluted	$	5,505		$	28,846
Denominator
Weighted average common shares outstanding - basic	88,239			87,781
Plus: dilutive effect of stock options and unvested restricted stock units	1,300			891
Weighted average common shares outstanding - diluted	89,539			88,672
Net income attributable per common share:
Basic	$	0.06		$	0.33
Diluted	$	0.06		$	0.33

For the three months ended March 31, 2014 and 2013, approximately 1.5 million options and RSUs in total were not included in the calculation of diluted EPS as their effect would have been anti-dilutive. In addition to the antidilutive effects of options and RSUs, we did not assume the conversion of the Series A preferred stock into common shares for purposes of calculating diluted EPS as the effects would have been anti-dilutive. If converted, as of March 31, 2014, the Series A preferred stock would represent approximately 13.5% of our common stock outstanding or 13.8 million additional common shares. See Note 12 — Series A Preferred Stock for further details regarding the preferred share offering.

Stock Repurchase Plan Authorizations

We continue to evaluate options to maximize the returns on our cash and maintain an appropriate capital structure, including, among other alternatives, repurchases of our common stock. Subject to certain restrictions on repurchases under our revolving credit facility, we have authorization to repurchase up to $350.0 million of our common stock. The number, price, structure and timing of the repurchases, if any, will be at our sole discretion and future repurchases will be evaluated by us depending on market conditions, liquidity needs and other factors. Share repurchases may be made in the open market or in privately negotiated transactions. The repurchase authorization does not have an expiration date and does not oblige us to acquire any particular amount of our common stock. The board of directors may suspend, modify or terminate the repurchase program at any time without prior notice.

During the three months ended March 31, 2014, we repurchased approximately 0.9 million shares at a weighted average price of $14.94 for an aggregate price of approximately $13.0 million excluding related commission charges, under our publicly-announced repurchase plan. As of March 31, 2014, we had approximately $337.0 million available for repurchase under our repurchase authorization.

12. SERIES A PREFERRED STOCK

On January 27, 2014, we issued to Blackstone, and certain of its permitted transferees (together with Blackstone, the “Blackstone Purchasers”), 200,000 shares of our Series A preferred stock for an aggregate purchase price of $198.0 million, or $990 per share, pursuant to an Investment Agreement between us and Blackstone, dated December 28, 2013 (as amended, the “Investment Agreement”). In connection with the issuance of the Series A preferred stock (the “Closing”), we received proceeds of $182.2 million after deducting the issuance discount of $2.0 million and direct and incremental expenses of $15.8 million including financial advisory fees, closing costs, legal expenses and other offering-related expenses.

Participation Rights and Dividends

The Series A preferred stock ranks senior to our common stock with respect to dividend rights and rights on liquidation, winding-up and dissolution. The Series A preferred stock has a stated value of $1,000 per share, and holders of Series A preferred stock are entitled to cumulative dividends payable quarterly in cash at a rate of 6% per annum. If we fail to make timely dividend payments, the dividend rate will increase to 8% per annum until such time as all accrued but unpaid dividends have been paid in full. Holders of Series A preferred stock are entitled to receive dividends declared or paid on our common stock and are entitled to vote together with the holders of our common stock as a single class, in each case, on an as-converted basis. As of March 31, 2014, we had accrued dividends of $2.1 million on the condensed consolidated balance sheets, which were paid in cash to Blackstone on April 1, 2014.

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Holders of Series A preferred stock have certain limited special approval rights, including with respect to the issuance of pari passu or senior equity securities of the Company.

Conversion Features

The Series A preferred stock is convertible at the option of the holders at any time after the Closing into shares of common stock at an implied conversion price of $14.50 per share, subject to adjustment. At our election, all or a portion of the Series A preferred stock will be convertible into the relevant number of shares of common stock on or after the third anniversary of the Closing, if the closing price of the common stock equals or exceeds $29.00 for 20 consecutive trading days. The Series A preferred stock are convertible into 13,793,100 shares of our common stock based on the conversion rate currently in place. The conversion rate is subject to customary anti-dilution and other adjustments.

Redemption Features

At any time after the eighth anniversary of the Closing, we will have the right to redeem and the holders of the Series A preferred stock will have the right to require us to repurchase, all or any portion of the Series A preferred stock at 100% of the stated value thereof plus all accrued but unpaid dividends. Upon certain change of control events involving us, the holders can require us to repurchase the Series A preferred stock at 101% of the stated value thereof plus all accrued but unpaid dividends.

In accordance with FASB ASC Topic 480-10-S99-3A, SEC Staff Announcement: Classification and Measurement of Redeemable Securities, redemption features which are not solely within the control of the issuer are required to be presented outside of permanent equity on the condensed consolidated balance sheets. Under the Investment Agreement and as noted above, the holder has the option to redeem the Series A preferred stock any time after January 27, 2022 or upon a change in control. As such, the Series A preferred stock is presented in temporary or mezzanine equity on the condensed consolidated balance sheets and will be accreted up to the stated redemption value of $202.1 million using an appropriate accretion method over a redemption period of eight years, as this represents the earliest probable date at which the Series A preferred stock will become redeemable.

Designation of Board of Directors

The Investment Agreement grants Blackstone certain rights to designate directors to serve on our Board. For so long as Blackstone and its permitted transferees (i) beneficially own at least 95% of the Series A preferred stock or the as-converted common stock purchased pursuant to the Investment Agreement or (ii) maintain beneficial ownership of at least 12.5% of the our outstanding common stock (the “Two-Director Threshold”), Blackstone will have the right to designate for nomination two directors to our Board. For so long as Blackstone and its permitted transferees beneficially own shares of Series A preferred stock or the as-converted common stock purchased pursuant to the Investment Agreement that represent less than the Two-Director Threshold but more than 25% of the number of shares of the as-converted common stock purchased pursuant to the Investment Agreement, Blackstone will have the right to designate for nomination one director to our Board. The directors designated by Blackstone are entitled to serve on Board committees, subject to applicable law and stock exchange rules, and one of such directors must be appointed to the newly-formed committee tasked with identifying a new chief executive officer to fill the vacancy resulting from Mr. McCarvel’s resignation.

Restrictions of the Holder

Pursuant to the Investment Agreement, Blackstone is subject to certain standstill restrictions which restrict Blackstone from acquiring more than 25% of our outstanding common stock until the date on which Blackstone is no longer entitled to designate any directors to the Board. In addition, subject to certain customary exceptions, Blackstone is restricted from transferring the Series A preferred stock

until the second anniversary of the Closing and, for so long as any Series A preferred stock is outstanding, may not transfer the Series A preferred stock to certain of our competitors (as defined in the Investment Agreement) or holders of 25% or more of our common stock. Blackstone also has certain preemptive rights and information rights under the Investment Agreement, which are subject to certain conditions.

Registration Rights Agreement

On January 27, 2014, we and the Blackstone Purchasers entered into a Registration Rights Agreement (the “Registration Rights Agreement”), pursuant to which we have agreed to provide to the Blackstone Purchasers certain customary demand and piggyback registration rights in respect of the shares of Series A preferred stock and any shares of common stock issued upon conversion of the Series A preferred stock. The Registration Rights Agreement contains customary terms and conditions, including certain customary indemnification obligations.

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13. COMMITMENTS & CONTINGENCIES

Rental Commitments and Contingencies

We rent space for certain of our retail stores, offices, warehouses, vehicles, and equipment under operating leases expiring at various dates through 2033. Certain leases contain rent escalation clauses (step rents) that require additional rental amounts in the later years of the term. Rent expense for leases with step rents or rent holidays is recognized on a straight-line basis over the lease term. Deferred rent is included in the condensed consolidated balance sheets in ‘Accrued expenses and other current liabilities.’

The following table summarizes the composition of rent expense under operating leases for the three months ended March 31, 2014 and 2013 (in thousands):

	Three Months Ended March 31,
	2014			2013
Minimum rentals (1)	$	29,242		$	24,270
Contingent rentals	2,423			2,496
Less: Sublease rentals	(180		)	(156		)
Total rent expense	$	31,485		$	26,610

(1)Minimum rentals include all lease payments as well as fixed and variable common area maintenance (“CAM”), parking and storage fees, which were approximately $2.4 million during the three months ended March 31, 2014 and 2013.

Purchase Commitments

As of March 31, 2014, we had purchase commitments with certain third party manufacturers for $210.4 million.

Government Tax Audits

We are regularly subject to, and are currently undergoing, audits by tax authorities in the United States and several foreign jurisdictions for prior tax years.

In April 2014, we received a notice of proposed assessment on certain transfer pricing items from Canadian tax authorities, which closes the ongoing audit of our Canada operations through 2011. The assessment, along with the estimated impact on certain Canadian provinces, is less than the amount of the uncertain tax benefits recorded, and therefore, will result in a net tax benefit of approximately $2.2 million in the quarter ending June 30, 2014. We intend to pay the assessment, which includes tax and interest for these periods.

See Note 15—Legal Proceedings for further details regarding potential loss contingencies related to government tax audits and other current legal proceedings.

14. OPERATING SEGMENTS & GEOGRAPHIC INFORMATION

We have four reportable operating segments based on the geographic nature of our operations: Americas, Asia Pacific, Japan and Europe. We also have an “Other businesses” category which aggregates insignificant operating segments that do not meet the reportable threshold and represent manufacturing operations located in Mexico, Italy and Asia. The composition of our reportable operating segments is consistent with that used by our Chief Operating Decision Maker (“CODM”) to evaluate performance and allocate resources.

Each of our reportable operating segments derives its revenues from the sale of footwear, apparel 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 the “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.

The primary financial measure utilized by the CODM to evaluate performance and allocate resources is segment operating income. Segment performance evaluation is based primarily on segment results without allocating corporate expenses, or indirect general, administrative and other expenses. Segment profits or losses of our reportable operating segments include adjustments to eliminate intersegment profit or losses on intersegment sales. As such, reconciling items for segment operating income represent unallocated corporate and other expenses as well as intersegment eliminations. Segment assets consist of cash and cash equivalents, accounts receivable and inventory as these balances are regularly reviewed by the CODM.

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The following table sets forth information related to our reportable operating business segments during the three months ended March 31, 2014 and 2013:

	Three Months Ended
	March 31,
($ thousands)	2014			2013
Revenues:
Americas	$	117,120		$	129,429
Asia Pacific	101,865			90,457
Japan	29,050			30,359
Europe	64,136			61,346
Total segment revenues	312,171			311,591
Other businesses	258			65
Total consolidated revenues	$	312,429		$	311,656
Operating income:
Americas	$	13,437		$	20,813
Asia Pacific	27,683			27,103
Japan	6,462			7,560
Europe	7,539			12,671
Total segment operating income	55,121			68,147
Reconciliation of total segment operating income to income before income taxes:
Other businesses	(3,756		)	(3,877		)
Intersegment eliminations	15			15
Unallocated corporate and other (1)	(34,558		)	(26,635		)
Total consolidated operating income	16,822			37,650
Foreign currency transaction losses, net	2,768			2,600
Interest income	(477		)	(306		)
Interest expense	191			209
Other income, net	(141		)	(28		)
Income before income taxes	$	14,481		$	35,175
Depreciation and amortization:
Americas	$	2,448		$	2,542
Asia Pacific	1,406			1,278
Japan	334			401
Europe	902			1,150
Total segment depreciation and amortization	5,090			5,371
Other businesses	1,599			2,117
Unallocated corporate and other (1)	2,684			2,776
Total consolidated depreciation and amortization	$	9,373		$	10,264

(1)Includes a corporate component consisting primarily of corporate support and administrative functions, costs associated with share-based compensation, research and development, brand marketing, legal, 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.

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The following table sets forth asset information related to our reportable operating business segments as of March 31, 2014 and December 31, 2013:

	March 31,		December 31,
($ thousands)	2014		2013
Assets:
Americas	$	200,229	$	139,855
Asia Pacific	204,536		177,343
Japan	51,154		51,155
Europe	139,142		137,701
Total segment current assets	595,061		506,054
Other businesses	21,710		14,093
Unallocated corporate and other(1)	193,624		63,743
Deferred tax assets, net	4,521		4,440
Income tax receivable	14,004		10,630
Other receivables	17,025		11,942
Prepaid expenses and other current assets	34,559		29,175
Total current assets	880,504		640,077
Property and equipment, net	86,413		86,971
Intangible assets, net	81,415		74,822
Deferred tax assets, net	19,688		19,628
Other assets	40,930		53,661
Total consolidated assets	$	1,108,950	$	875,159

(1)Corporate assets primarily consist of cash and equivalents which increased predominately due to net cash proceeds from our investment with Blackstone. See Note 12 — Series A Preferred Stock for further details regarding the preferred share offering.

15. LEGAL PROCEEDINGS

We and certain current and former officers and directors have been named as defendants in complaints filed by investors in the United States District Court for the District of Colorado. The first complaint was filed in November 2007 and several other complaints were filed shortly thereafter. These actions were consolidated and, in September 2008, the district court appointed a lead plaintiff and counsel. An amended consolidated complaint was filed in December 2008. The amended complaint purports to state claims under Sections 10(b), 20(a), and 20A of the Exchange Act on behalf of a class of all persons who purchased our common stock between April 2, 2007 and April 14, 2008 (the “Class Period”). The amended complaint also added our independent auditor as a defendant. The amended complaint alleges that, during the Class Period, the defendants made false and misleading public statements about us and our business and prospects and, as a result, the market price of our common stock was artificially inflated. The amended complaint also claims that certain current and former officers and directors traded in our common stock on the basis of material non-public information. The amended complaint seeks compensatory damages on behalf of the alleged class in an unspecified amount, including interest, and also added attorneys’ fees and costs of litigation. On February 28, 2011, the District Court granted motions to dismiss filed by the defendants and dismissed all claims. A final judgment was thereafter entered. Plaintiffs subsequently appealed to the United States Court of Appeals for the Tenth Circuit. We and those current and former officers and directors named as defendants have entered into a Stipulation of Settlement with the plaintiffs that would, if approved by the United States District Court for the District of Colorado, resolve all claims asserted against us by the plaintiffs on behalf of the putative class, and plaintiffs’ appeal would be dismissed. Our independent auditor is not a party to the Stipulation of Settlement. The Stipulation of Settlement received preliminary approval from the District Court on August 28, 2013. It remains subject to customary conditions, including final court approval following notice to stockholders. On February 13, 2014, a final settlement hearing took place and the parties are awaiting a final ruling on the settlement. If the settlement becomes final, all amounts required by the settlement will be paid by our insurers. There can be no assurance that the settlement will be finally approved by the District Court, or that approval by the District Court will, if challenged, be upheld by the Tenth Circuit.

On October 27, 2010, Spectrum Agencies (“Spectrum”) filed suit against our subsidiary, Crocs Europe B.V. (“Crocs Europe”), in the High Court of Justice, Queen’s Bench Division, Royal Courts of Justice in London, United Kingdom (“UK”). Spectrum acted as an agent for Crocs products in the UK from 2005 until Crocs Europe terminated the relationship on July 3, 2008 due to Spectrum’s breach of its duty to act in good faith towards Crocs Europe. Spectrum alleges that Crocs Europe unlawfully terminated the agency relationship and failed to pay certain sales commissions. A trial on the liability, not quantum (compensation and damages), was held at the High Court in London from November 30, 2011 to December 5, 2011. On December 16, 2011, the High Court of Justice issued a

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judgment that found that although Spectrum’s actions were a breach of its duty to act in good faith towards Crocs Europe the breach was not sufficiently severe to justify termination. We believe that the trial judge erred in his findings and subsequently appealed the judgment.  On October 30, 2012, the Court of Appeal handed down its judgment confirming the trial judge’s findings. We submitted a request to the Supreme Court seeking permission to appeal.  On April 24, 2013 the Supreme Court declined to grant permission to appeal.  Given that to date the legal proceedings in this case have only addressed liability, there have been no findings in relation to the amount of compensation or damages other than with respect to legal fees. Under English law, the prevailing party is entitled to reimbursement of reasonable legal fees incurred in the proceedings. We expect that Spectrum will now request to move to the damages phase via a case management conference, during which the Court will provide instructions and schedules leading up to the trial on damages.  Spectrum has not formally filed a court claim for compensation and damages and the amount will be assessed later in the proceedings.  A trial and judgment on damages could take up to 12 months.

We are currently subject to an audit by U.S. Customs & Border Protection (“CBP”) in respect of the period from 2006 to 2010.  In October 2013, CBP issued a revised final audit report. In that report CBP projects that unpaid duties totaling approximately $12.4 million are due for the period under review (a reduction from $14.3 million in the preliminary draft report issued in 2012).  We have responded that these projections are erroneous and provided arguments that demonstrate the amount due in connection with this matter is considerably less than the projection.  It is not possible at this time to predict whether our arguments will be successful in eliminating or reducing the amount in dispute.  CBP has stated that the final report will recommend collection of the duties due.  At this time, it is not possible to determine precisely when a notice of claim will be received from CBP, but currently we anticipate a notice of claim could be received sometime in the second or third quarter of 2014.  Likewise, it is not possible to predict with any certainty whether CBP will seek to assert a claim for penalties in addition to any unpaid duties, but such an assertion is a possibility.

Mexico’s Federal Tax Authority (“SAT”) audited the period from January 2006 to July 2011.  There were two phases to the audit, the first for capital equipment and finished goods and the second for raw materials.  The first phase was completed and no major discrepancies were noted by the SAT.  On January 9, 2013, Crocs received a notice for the second phase in which the SAT issued a tax assessment (taxes and penalties) of roughly 280.0 million pesos (approximately $22.0 million) based on the value of all of Crocs’ imported raw materials during the audit period.  We believe that the proposed penalty amount is unfounded and without merit. We filed an appeal by the deadline of March 15, 2013.  We have argued that the amount due in connection with the matter, if any, is substantially less than that proposed by the SAT.  In connection with the appeal, the SAT required us to post an appeal surety bond in the amount of roughly 321.0 million pesos (approximately $26.0 million), which amount reflects estimated additional penalties and interest if we are not successful on our appeal.  This amount will be adjusted on an annual basis. We expect it to take between two and three years for resolution of this matter in the Mexican courts.  It is not possible at this time to predict the outcome of this matter or reasonably estimate any potential loss.

As of March 31, 2014, we have accrued a total of $13.4 million relating to these litigation matters and other disputes. We estimate that the ultimate resolution of these litigation matters and other disputes could result in a loss that is reasonably possible between $0 and $10.3 million in the aggregate, in excess of the amount accrued.

Although we are subject to other litigation from time to time in the ordinary course of business, including employment, intellectual property and product liability claims, we are not party to any other pending legal proceedings that we believe will have a material adverse impact on our business, financial position, results of operations or cash flows.

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ITEM 2.  Management’s Discussion and Analysis of Financial Condition and Results of Operations

Business Overview

We are a designer, developer, manufacturer, worldwide marketer and distributor of casual lifestyle footwear, apparel and accessories for men, women and children. We strive to be the global leader in the sale of molded footwear featuring fun, comfort, color and functionality. Our products include footwear and accessories that utilize our proprietary closed cell-resin, called Croslite. Our products include footwear and accessories that utilize our proprietary closed-cell resin, called Croslite. The use of this unique material enables us to produce innovative, lightweight, non-marking, and odor-resistant footwear. We currently sell our products in more than 90 countries through domestic and international retailers and distributors and directly to end-user consumers through our company-operated retail stores, outlets, kiosks and webstores.

Since the initial introduction and popularity of the Beach and Crocs Classic designs, we have expanded our Croslite products to include a variety of new styles and products and have further extended our product reach through the acquisition of brand platforms such as Jibbitz and Ocean Minded. We intend to continue to expand the breadth of our footwear product lines, bringing a unique and original perspective to the consumer in styles that may be unexpected from Crocs. We believe this will help us to continue to build a stable year-round business as we move toward becoming a four-season brand.

The broad appeal of our footwear has allowed us to market our products to a wide range of distribution channels, including department stores and traditional footwear retailers as well as a variety of specialty and independent retail channels. Our marketing efforts surround specific product launches and employ a fully integrated approach utilizing a variety of media outlets, including print and websites. Our marketing efforts drive business to both our wholesale partners and our company-operated retail and internet stores, ensuring that our presentation and story are first class and drive purchasing at the point of sale.

As a global company, we have significant revenues and costs denominated in currencies other than the U. S. Dollar. Sales in international markets in foreign currencies are expected to continue to represent a substantial portion of our revenues. Likewise, we expect our subsidiaries with functional currencies other than the United States (“U.S.”) Dollar will continue to represent a substantial portion of our overall gross margin and related expenses. Accordingly, changes in foreign currency exchange rates could materially affect revenues and costs or the comparability of revenues and costs from period to period as a result of translating our financial statements into our reporting currency.

Recent Events

On January 27, 2014, we issued to Blackstone Capital Partners VI L.P. (“Blackstone”) and certain of its permitted transferees, 200,000 shares of our Series A Convertible Preferred Stock (“Series A preferred stock”) for an aggregate purchase price of $198.0 million, or $990 per share, pursuant to an Investment Agreement between us and Blackstone, dated December 28, 2013 (as amended, the “Investment Agreement”). In connection with the issuance of the Series A preferred stock (the “Closing”) and pursuant to the Investment Agreement, we paid Blackstone a closing fee of $2.0 million, reimbursed Blackstone’s transaction fees and expenses of approximately $4.0 million and incurred additional expenses of $9.8 million associated with the closing of the deal for net cash proceeds of $182.2 million. As of March 31, 2014, the Blackstone investment represents approximately 13.5% ownership of the Company on an as-converted basis. We believe this investment provides an opportunity to drive stockholder value and refine the strategic direction of the business.

Financial Highlights

During the three months ended March 31, 2014, we continued to experience strong revenue and operating results in our Asia Pacific segment as market demand continues to exceed expectations. We also experienced steady revenue growth in our Europe segment despite sudden unfavorable exchange rates between the Russian Ruble and the U.S. Dollar initiated by political turmoil, which impacted segment revenues by approximately $0.8 million. Operating results for our Europe segment were down due to several factors including lower gross margins due to product mix and a charge of $1.4 million related to on-going litigation. Similar to other retailers, we experienced a difficult business environment in late March in our Americas and Europe segments primarily associated with the impact of the shift of the Easter holiday from March in 2013 into April in 2014. In addition, we continue to see challenges in our Americas wholesale market as accounts remain lean on inventory. We continue to face macroeconomic challenges in our Japan segment. On a constant-currency basis, our Japan segment performed stronger than prior year; however, limited ability for growth in Japan due to macroeconomic turmoil continues to present challenges for the business as we saw the lingering decline of Japanese Yen decrease year-over-year revenues by almost $2.9 million and operating income by $0.5 million.

Globally, we are focused on expanding and improving current relationships with wholesale partners; however, as mentioned above, wholesale accounts remaining lean on inventory levels coupled with conservative at-once ordering affected our first quarter results when compared to prior year. Despite the timing of the Easter holiday and difficult retail

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markets in certain areas around the globe, we experienced a $6.1 million, or 8.6%, increase in retail channel revenues on a constant currency basis primarily through the addition of 76 global retail locations (net of store closures) partially offset by a 1.5% decrease in comparable store sales compared to prior year. As we continue to diversify our product line with new footwear brands such as the Stretch Sole and Busy Day and carryover products such as the Huarache and A-Leigh wedge, we are experiencing a reduction in clog sales as a percentage of revenues. During the three months ended March 31, 2014, clog silhouettes represented approximately 42% of sales as compared to 47% in 2013. This decrease in clog sales and higher percentage of loafers and other non-fully molded casual footwear styles contributed to lower margins.

Following the closing of the Blackstone investment and the announcement of the resignation of our President and CEO, we have identified key areas of focus for the business going forward; however, we are entering a time of transition as we refocus our strategy on enhancing returns for stockholders and becoming the leading brand in casual lifestyle footwear. We believe the investment by Blackstone conveys a strong financial commitment in our brand and, coupled with our strong balance sheet, will enhance our long-term growth strategy.

The following are the more significant developments in our businesses during the three months ended March 31, 2014:

·Revenues increased $0.8 million, or 0.2%, to $312.4 million compared to 2013. Revenue growth was predominately driven by a global average selling price increase of 2.5% realized through new and classic product expansion.

·Gross profit decreased $9.6 million, or 5.8%, to $156.2 million and gross margin percentage decreased 320 basis points, or 6.0%, to 50.0% compared to 2013. The decline in gross margin percentage is primarily driven by the evolution of our product assortment and is consistent with our product strategy. As we expand our product lines, product mix shifts into styles that may utilize more expensive materials such as textile fabric and leather compared to the traditional clog.

·Selling, general and administrative expenses increased $11.2 million, or 8.7%, to $139.4 million compared to 2013. Selling, general and administrative expenses continued to rise as we increased fixed charges as a result of global retail expansion. In addition, we experienced an increase of $6.3 million in expenses that we believe to be non-indicative of our underlying business trends including restructuring charges as a result of transition activities, additional operating expenses related to our ERP implementation, charges related to on-going litigation and a liability for two accelerated store closures in Europe.

·Net income attributable to common stockholders decreased $22.6 million, or 78.0%, to $6.4 million compared to 2013 driving our diluted earnings per share from $0.33 to $0.06. This decrease is primarily attributable to the gross profit decrease and selling, general and administrative expenses increase mentioned above as well as dividends declared on our Series A preferred stock and dividend equivalents as a result of our recent investment from Blackstone, which contributed a decrease of $2.8 million in net income or $0.04 in diluted earnings per share.

·We have begun to slow our expansion of our retail channel locations and focus on the long-term profitability of current locations. We opened four global retail locations in the first quarter 2014 as compared to ten global retail locations in the first quarter of 2013. In January 2014, we opened our much anticipated three-story flagship location with approximately 4,500 square feet of selling space in a 13,600 square foot building located on 34th Street in New York. In addition, we closed two locations in our Europe segment which were not scheduled to close until future periods and were selected for closure by management based on historical and projected profitability levels, relocation plans, and other factors.

·We continue to fund the implementation of our customized and fully integrated operations, accounting, and finance ERP system, which is expected to launch globally in late 2014. The introduction of the new ERP system to our current environment will allow for seamless and high-quality data across the Company. As of March 31, 2014, total costs to date related to the ERP implementation were $52.4 million, of which $43.6 million was capitalized and $8.8 million was expensed. As of March 31, 2014, we had $15.5 million in outstanding borrowings related to the ERP system under a Master Installment Payment Agreement (“Master IPA”) with PNC Equipment Finance, LLC (“PNC Equipment”).

·We repurchased approximately 0.9 million shares at an average price of $14.94 per share for an aggregate price of approximately $13.0 million excluding related commission charges, under our publicly-announced repurchase plan. As of March 31, 2014, we had approximately $337.0 million available for repurchase under our repurchase authorization.

Remaining 2014 Outlook

Given the recent events including the investment from Blackstone and the resignation of our CEO, we will undergo some strategic transitioning during the next fiscal year to refine our short-term and long-term growth strategies, which will include prioritizing earnings growth, and our focus on becoming the leading brand in casual lifestyle footwear. The investment by Blackstone is a vote of confidence in our company and our brand, and we anticipate both will benefit from Blackstone’s financial, consumer, retail and brand experience. Due to these recent events and additional changes expected in 2014, we expect an environment that is more challenging to predict the impact on our business, financial position and results of operations.

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We began 2014 with a renewed sense of focus and an emphasis on delivering stockholder value. In April of 2014, we repurchased an additional 0.3 million shares; however, we intend to be patient, methodical and opportunistic in the execution of our buyback plan. In addition, we are excited about the early success of our new product launches for spring/summer, including the Stretch Sole and Busy Day, as well as carryover products such as the Huarache and A-Leigh wedge, which are proving more successful in their second seasons. Entering the second quarter, our backlog was up approximately $57.4 million to $350.3 million. The following table summarizes wholesale backlog by reportable operating segment as of March 31, 2014 and 2013:

	March 31,
($ thousands)	2014		2013
Americas	$	107,275	$	95,701
Asia Pacific	124,487		113,972
Japan	52,687		49,394
Europe	65,841		33,871
Total backlog (1)	$	350,290	$	292,938

(1)  We receive a significant portion of orders from our wholesale customers and distributors that remain unfilled as of any date and, at that point, represent orders scheduled to be shipped at a future date. We refer to these unfilled orders as backlog. While all orders in our backlog are subject to cancellation by customers, we expect that the majority of such orders will be filled within one year. Backlog as of a particular date is affected by a number of factors, including seasonality, manufacturing schedule and the timing of product shipments. Further, the mix of future and immediate delivery orders can vary significantly period over period. Backlog only relates to wholesale and distributor orders for the next season and current season fill-in orders and excludes potential sales in our retail and internet channels. Backlog also is affected by the timing of customers’ orders and product availability. Due to these factors and since the unfulfilled orders can be canceled at any time prior to shipment by our customers, we believe that backlog may be an imprecise indicator of future revenues that may be achieved in a fiscal period and comparisons of backlog from period to period may be misleading. In addition, our historical cancellation experience may not be indicative of future cancellation rates.

We have implemented several investment strategies that we believe will drive revenue growth while improving the operational and technological efficiency of the business. In 2014, as we intend to increasingly focus on profitable growth and retail excellence, we will moderate the pace of our investments in new retail stores as well as consolidate some existing locations. We remain in the testing and development phase of our ERP system implementation. This implementation represents the beginning of a transformational change intended to improve our operational efficiency as we adapt as a global company. We expect to launch our new ERP system globally in late 2014.

Overall, the organization is focused on delivering stockholder value through our focus on casual lifestyle footwear sales and balancing long-term global growth between company-operated retail locations, partner store and multiband independent wholesale accounts and internet sites in local languages.

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Results of Operations

Comparison of the Three Months Ended March 31, 2014 and 2013

	Three Months Ended March 31,						Change
($ thousands, except per share data and average footwear selling price)	2014			2013			$			%
Revenues	$	312,429		$	311,656		$	773		0.2	%
Cost of sales	156,202			145,807			10,395			7.1
Gross profit	156,227			165,849			(9,622		)	(5.8	)
Selling, general and administrative expenses	139,405			128,199			11,206			8.7
Income from operations	16,822			37,650			(20,828		)	(55.3	)
Foreign currency transaction losses, net	2,768			2,600			168			6.5
Interest income	(477		)	(306		)	(171		)	55.9
Interest expense	191			209			(18		)	(8.6	)
Other income, net	(141		)	(28		)	(113		)	403.6
Income before income taxes	14,481			35,175			(20,694		)	(58.8	)
Income tax expense	5,357			6,214			(857		)	(13.8	)
Net income	9,124			28,961			(19,837		)	(68.5	)
Dividends on Series A convertible preferred shares	2,133			—			2,133			—
Dividend equivalents on Series A convertible preferred shares related to redemption value accretion and beneficial conversion feature	618			—			618			—
Net income attributable to common stockholders	$	6,373		$	28,961		$	(22,588	)	(78.0	)%
Net income per common share:
Basic	$	0.06		$	0.33		$	(0.27	)	(81.1	)%
Diluted	$	0.06		$	0.33		$	(0.27	)	(81.4	)%
Gross margin	50.0		%	53.2		%	(320		)bps	(6.0	)%
Operating margin	5.4		%	12.1		%	(670)		bps	(55.4	)%
Footwear unit sales	14,981			15,291			(310		)	(2.0	)%
Average footwear selling price	$	20.39		$	19.89		$	0.50		2.5	%

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Revenues. During the three months ended March 31, 2014, revenues increased $0.8 million, or 0.2%, compared to the same period in 2013, primarily due to an increase of $0.50 per unit, or 2.5%, in average footwear selling price primarily driven by new product introductions and a product mix shift from clogs to non-clog styles. This increase was partially offset by a decrease of 0.3 million, or 2.0%, in global footwear unit sales.

For the three months ended March 31, 2014, revenues from our wholesale channel decreased $3.0 million, or 1.4%, compared to 2013, which was primarily driven by decreased wholesale demand in our Americas and Japan segments partially offset by increased wholesale sales in our Asia Pacific and Europe segments. Wholesale decreases were primarily driven by lower than anticipated at-once sales as a result of accounts remaining lean on inventory in our Americas segment and continued macroeconomic pressure leading to unfavorable exchange rates between the Japanese Yen and U.S. Dollar in our Japan segment.

For the three months ended March 31, 2014, revenues from our retail channel increased $4.5 million, or 6.3%, compared to 2013, which was primarily driven by our global retail expansion as we opened 76 company-operated stores (net of store closures) since March 31, 2013 partially offset by a 1.5% decrease in comparable store sales.  Although we expanded our global retail presence in 2013, we have begun to and plan on continuing to moderate the pace of our retail expansion in 2014 with a focus on consolidating and enhancing the profitability of existing locations. This increase was driven by a global balance as we realized retail revenue growth in all four segments with key growth in our Asia Pacific and Europe markets. Although our retail channel grew in each of our geographical segments on a year-over-year basis, we experienced lower retail sales in our Americas and Europe segments driven by the shift of the Easter holiday from March in 2013 to April in 2014 and continue to see weakness in consumer spending in our Japan segment as lingering effects of recessionary traffic continues to impact retail markets.

For the three months ended March 31, 2014, revenues from our internet channel decreased $0.7 million, or 3.3%, compared to 2013, which was primarily driven by decreased internet sales in Americas and Japan partially offset by increased internet sales in Europe and Asia Pacific. Our internet sales totaled approximately 6.3% and 6.5% of our consolidated net sales in the three months ended March 31, 2014 and 2013, respectively. We continue to increase our online presence by adding new webstores worldwide enabling us to have increased access to our customers in a low cost, attractive manner and providing an opportunity to educate them about our products and brand.

Impact on Revenues due to Foreign Exchange Rate Fluctuations. Changes in average foreign currency exchange rates used to translate revenues from our functional currencies to our reporting currency during the three months ended March 31, 2014 decreased our revenues by $3.9 million compared to 2013. The majority of this decrease was related to the decrease in value of the Japanese Yen, Brazilian Real and Russian Ruble compared to the U.S. Dollar partially offset by an increase in the Euro compared to the U.S. Dollar.

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The following table summarizes our total revenue by channel for the three months ended March 31, 2014 and 2013:

	Three Months Ended March 31,				Change					Constant Currency Change(1)
($ thousands)	2014		2013		$			%		$			%
Channel revenues:
Wholesale:
Americas	$	70,175	$	81,604	$	(11,429	)	(14.0	)%	$	(10,294	)	(12.6	)%
Asia Pacific	77,997		69,554		8,443			12.1		8,888			12.8
Japan	21,047		22,527		(1,480		)	(6.6	)	536			2.4
Europe	47,780		46,533		1,247			2.7		(325		)	(0.7	)
Other businesses	258		65		193			296.9		166			255.4
Total Wholesale	217,257		220,283		(3,026		)	(1.4	)	(1,029		)	(0.5	)
Consumer-direct:
Retail:
Americas	36,581		35,904		677			1.9		1,089			3.0
Asia Pacific	22,119		19,597		2,522			12.9		3,007			15.3
Japan	6,130		5,901		229			3.9		930			15.8
Europe	10,730		9,689		1,041			10.7		1,085			11.2
Total Retail	75,560		71,091		4,469			6.3		6,111			8.6
Internet:
Americas	10,364		11,921		(1,557		)	(13.1	)	(1,444		)	(12.1	)
Asia Pacific	1,749		1,306		443			33.9		548			42.0
Japan	1,873		1,931		(58		)	(3.0	)	166			8.6
Europe	5,626		5,124		502			9.8		337			6.6
Total Internet	19,612		20,282		(670		)	(3.3	)	(393		)	(1.9	)
Total revenues:	$	312,429	$	311,656	$	773		0.2	%	$	4,689		1.5	%

(1)  Reflects quarter over quarter change as if the current period results were in “constant currency,” which is a non-GAAP financial measure. See “Non-GAAP Financial Measures” below for more information.

The table below illustrates the overall growth in the number of our company-operated retail locations by type of store and reportable operating segment from December 31, 2012 to March 31, 2014:

Company-operated retail locations:	December 31, 2012	Opened	Closed		March 31, 2013	Opened	Closed		December 31, 2013	Opened	Closed		March 31, 2014
Type:
Kiosk/Store in Store	121	6	(11	)	116	17	(11	)	122	2	(4	)	120
Retail Stores	287	17	(9	)	295	50	(18	)	327	14	(7	)	334
Outlet Stores	129	7	—		136	36	(2	)	170	9	(10	)	169
Total	537	30	(20	)	547	103	(31	)	619	25	(21	)	623
Operating segment:
Americas	199	8	(4	)	203	27	(14	)	216	4	(7	)	213
Asia Pacific	201	6	(12	)	195	55	(14	)	236	15	(11	)	240
Japan	40	6	—		46	5	(2	)	49	4	(1	)	52
Europe	97	10	(4	)	103	16	(1	)	118	2	(2	)	118
Total	537	30	(20	)	547	103	(31	)	619	25	(21	)	623

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The table below sets forth our comparable store sales by reportable operating segment for the year ended March 31, 2014 as compared to 2013:

	Constant Currency		Constant Currency
	Three Months Ended		Three Months Ended
Comparable store sales (1)	March 31, 2014(2)		March 31, 2013(2)
Americas	(5.0	)%	(10.3	)%
Asia Pacific	4.5		7.3
Japan	(0.1	)	(5.8	)
Europe	0.6		(7.3	)
Global	(1.5	)%	(5.2	)%

(1)Comparable store sales is determined on a monthly basis. Comparable store sales begin in the thirteenth month of a store’s operation. Stores in which selling square footage has changed more than 15% as a result of a remodel, expansion or reduction are excluded until the thirteenth month in which they have comparable prior year sales. Temporarily closed stores are excluded from the comparable store sales calculation during the month of closure. Location closures in excess of three months are excluded until the thirteenth month post re-opening. Comparable store sales growth is calculated on a currency neutral basis using historical annual average currency rates.

(2)Reflects quarter over quarter change as if the current period results were in “constant currency,” which is a non-GAAP financial measure. See “Non-GAAP Financial Measures” below for more information.

Gross profit. During the three months ended March 31, 2014, gross profit decreased $9.6 million, or 5.8%, compared to 2013, which was primarily attributable to a $10.4 million, or 7.1%, increase in cost of sales, partially offset by the 0.2% increase in revenues as a result of higher average footwear selling prices. Gross margin percentage decreased 320 basis points compared to 2013. The decline in gross margin percentage is primarily driven by the evolution of our product assortment and is consistent with our product strategy. As we expand our product lines, product mix shifts into styles that may utilize more expensive materials such as textile fabric and leather compared to the traditional clog. In addition, we experienced increased duties and labor costs in order to meet product demand.

Impact on Gross Profit due to Foreign Exchange Rate Fluctuations. Changes in average foreign currency exchange rates used to translate revenues and costs of sales from our functional currencies to our reporting currency during the three months ended March 31, 2014 decreased our gross profit by $1.7 million compared to 2013. The majority of this decrease was related to the decrease in value of the Japanese Yen, Brazilian Real and Russian Ruble compared to the U.S. Dollar partially offset by an increase in the Euro compared to the U.S. Dollar.

Selling, General and Administrative Expenses. Selling, general and administrative expenses increased $11.2 million, or 8.7%, during the three months ended March 31, 2014 compared to 2013. The increase in selling, general and administrative expenses is primarily due to:

(i) an increase of $4.9 million, or 9.0%, related to the global expansion of our retail channel, in which we opened 76 company-operated stores (net of store closures) during the year. This increase includes $3.8 million of additional building expenses such as rent, maintenance fees and store closure costs, $1.3 million in additional labor expenses and $0.9 million in outside services partially offset by a decrease in miscellaneous expenses of $0.6 million;

(ii) an increase of $3.8 million, or 11.6%, related to non-retail labor charges which includes variable and stock compensation related to certain restructuring activities as well as severance package expenses primarily related to the resignation of our CEO;

(iii) an increase of $0.9 million, or 8.5%, related to non-retail professional expenses related to various litigation services, consulting fees, contract labor and other outside services. This increase includes $1.4 million of additional charges related to on-going litigation partially offset by a $0.5 million decrease in outside services; and

(iv) an increase of $0.7 million in non-retail marketing expenses, which was part of a company-wide initiative to increase advertising and agency services in order to help drive demand.

As a percentage of revenue, selling, general and administrative expenses increased 8.5%, or 350 basis points, to 44.6% during the three months ended March 31, 2014 compared to 2013.

Impact on Selling, General, and Administrative Expenses due to Foreign Exchange Rate Fluctuations. Changes in average foreign currency exchange rates used to translate expenses from our functional currencies to our reporting currency during the three months ended March 31, 2014, decreased selling, general and administrative expenses by approximately $1.6 million compared to 2013. The majority of this decrease was related to the decrease in value of the Japanese Yen, Brazilian Real and Russian Ruble compared to the U.S. Dollar partially offset by an increase in the Euro compared to the U.S. Dollar.

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Foreign Currency Transaction Losses. The line item entitled ‘Foreign currency transaction (gains) losses, net’ is comprised of foreign currency gains and losses from the re-measurement and settlement of monetary assets and liabilities denominated in non-functional currencies and the impact of certain foreign currency derivative instruments. During the three months ended March 31, 2014, losses on foreign currency transactions increased $0.2 million, or 6.5%, compared to 2013. This increase is primarily related to an $11.7 million decrease in net gains associated with our derivative instruments and our ability to hedge foreign currency fluctuations through undesignated forward instruments compared to 2013. This difference was partially offset by an $11.5 million decrease in net losses associated with exposure from day-to-day business transactions in various foreign currencies compared to 2013.

Income tax expense. During the three months ended March 31, 2014, income tax expense decreased $0.9 million. Our effective tax rate increased 19.3% compared to the same period in 2013, as a result of increased profitability in higher tax jurisdictions and losses recorded in tax jurisdictions for which no tax benefits are being recorded. Our effective tax rate of 37.0% for the three months ended March 31, 2014 differs from the federal U.S. statutory rate primarily because of differences between income tax rates between U.S. and foreign jurisdictions and due to increased profitability in higher tax jurisdictions.

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Presentation of Reportable Segments

We have four reportable operating segments based on the geographic nature of our operations: Americas, Asia Pacific, Japan and Europe. We also have an “Other businesses” category which aggregates insignificant operating segments that do not meet the reportable threshold and represent manufacturing operations located in Mexico, Italy and Asia. The composition of our reportable operating segments is consistent with that used by our Chief Operating Decision Maker (“CODM”) to evaluate performance and allocate resources.

Each of our reportable operating segments derives its revenues from the sale of footwear, apparel 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 the “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.

The primary financial measure utilized by the CODM to evaluate performance and allocate resources is segment operating income. Segment performance evaluation is based primarily on segment results without allocating corporate expenses, or indirect general, administrative and other expenses. Segment profits or losses of our reportable operating segments include adjustments to eliminate intersegment profit or losses on intersegment sales. As such, reconciling items for segment operating income represent unallocated corporate and other expenses as well as intersegment eliminations. Segment assets consist of cash and cash equivalents, accounts receivable and inventory as these balances are regularly reviewed by the CODM.

Comparison of the Three Months Ended March 31, 2014 and 2013 by Segment

The following table sets forth information related to our reportable operating business segments for the three months ended March 31, 2014 and 2013:

	Three Months Ended March 31,						Change					Constant Currency Change (4)
($ thousands)	2014			2013			$			%		$			%
Revenues:
Americas	$	117,120		$	129,429		$	(12,309	)	(9.5	)%	$	(10,649	)	(8.2	)%
Asia Pacific	101,865			90,457			11,408			12.6		12,443			13.8
Japan	29,050			30,359			(1,309		)	(4.3	)	1,632			5.4
Europe	64,136			61,346			2,790			4.5		1,097			1.8
Total segment revenues	312,171			311,591			580			0.2		4,523			1.5
Other businesses	258			65			193			296.9		166			255.4
Total consolidated revenues	$	312,429		$	311,656		$	773		0.2	%	$	4,689		1.5	%
Operating income (loss):
Americas	$	13,437		$	20,813		$	(7,376	)	(35.4	)%	$	(7,415	)	(35.6	)%
Asia Pacific	27,683			27,103			580			2.1		574			2.1
Japan	6,462			7,560			(1,098		)	(14.5	)	(574		)	(7.6	)
Europe	7,539			12,671			(5,132		)	(40.5	)	(5,477		)	(43.2	)
Total segment operating income	55,121			68,147			(13,026		)	(19.1	)	(12,892		)	(18.9	)
Other businesses(1)	(3,756		)	(3,877		)	121			(3.1	)	360			(9.3	)
Intersegment eliminations	15			15			—			0.0		—			—
Unallocated corporate and other(2)	(34,558		)	(26,635		)	(7,923		)	29.7		(7,889		)	29.6
Total consolidated operating income(3)	$	16,822		$	37,650		$	(20,828	)	(55.3	)%	$	(20,421	)	(54.2	)%

(1)   During the three months ended March 31, 2014, operating losses of Other businesses decreased $0.1 million compared to 2013, primarily due to a $0.3 million increase in gross margin partially offset by $0.2 million increase in selling, general and administrative expenses.

(2)   Includes a corporate component consisting primarily of corporate support and administrative functions, costs associated with share-based compensation, research and development, brand marketing, legal, depreciation on corporate and other assets not allocated to operating segments and costs of the same nature of certain corporate holding companies. For the three months ended March 31, 2014, Unallocated corporate and other expenses increased $7.9 million compared to the same period in 2013, primarily due to a $6.8 million increase in selling, general and administrative costs due to severance expenses, bonuses and consulting fees related to recent restructuring activities and our investment agreement with Blackstone as well as operating expenses related to the implementation of our ERP system.

(3)   Please refer to our Results of Operations to reconcile total consolidated operating income to net income as segment information does not have an effect on values below total consolidated operating income.

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(4)Reflects quarter over quarter change as if the current period results were in “constant currency,” which is a non-GAAP financial measure. See “Non-GAAP Financial Measures” below for more information.

Americas Operating Segment. During the three months ended March 31, 2014, revenues from our Americas segment decreased $12.3 million, or 9.5%, compared to 2013 primarily due to an 11.4% decrease in footwear units sold and a $1.7 million unfavorable impact from foreign currency fluctuations driven by weakening of the Brazilian Real against the U.S. Dollar. This decrease was partially offset by a 2.1% increase in average footwear unit selling price. During the three months ended March 31, 2014, revenue declines for the region were realized primarily in the wholesale channel which decreased $11.4 million, or 14.0%, and in the internet channel which decreased $1.6 million, or 13.1% compared to 2013. The decrease in wholesale channel revenue was predominately driven by lower than anticipated at-once sales as a result of accounts remaining lean on inventory. The decrease in internet channel revenue was predominately driven by a decrease in average footwear selling price related to internet sales. Partially offsetting these decreases in wholesale and internet channel revenues was an increase of $0.7 million, or 1.9%, in our retail channel, which is primarily the result of the addition of ten company-operated stores (net of store closures) since March 31, 2013. This increase in retail revenue was partially offset by a 5.0% decrease in comparable store sales and the shift of the Easter holiday from March in 2013 to April in 2014. During the three months ended March 31, 2014, segment operating income decreased $7.4 million, or 35.4%, compared to 2013 driven predominately by the revenue decrease noted above and a decrease in segment gross margins of 310 basis points, or 6.3%. Partially offsetting these decreases was a $2.3 million, or 5.3%, decrease in selling, general and administrative expenses compared to 2013.

Asia Pacific Operating Segment. During the three months ended March 31, 2014, revenues from our Asia Pacific segment increased $11.4 million, or 12.6%, compared to 2013 primarily due to a 8.3% increase in average footwear selling price and a 4.8% increase in footwear units sold. These increases were partially offset by a $1.0 million unfavorable impact from foreign currency fluctuations. During the three months ended March 31, 2014, we realized revenue growth in the region in all three channels compared to 2013. Our wholesale channel revenue increased $8.4 million, or 12.1%, primarily due to the expansion of our wholesale doors and the continued support from existing customers. Our direct-to-consumer channel revenues increased $3.0 million, or 14.2%, primarily due to the addition of 45 company-operated stores (net of store closures) since March 31, 2013 coupled with a 4.5% increase in comparable store sales. During the three months ended March 31, 2014, segment operating income increased $0.6 million, or 2.1%, compared to 2013 driven predominately by the revenue increase noted above. Partially offsetting this increase was a $2.9 million, or 10.6%, increase in selling, general and administrative expenses compared to 2013 driven predominantly by the expansion of our retail channel and increased salaries and wages as we added approximately 54 full-time employees to our growing Asia Pacific business, and a decrease in segment gross margins of 330 basis points, or 5.5%.

Japan Operating Segment.    During the three months ended March 31, 2014, revenues from our Japan segment decreased $1.3 million, or 4.3%, compared to 2013 primarily due to a 13.7% decrease in average footwear selling price and a $2.9 million unfavorable impact from foreign currency fluctuations. These decreases were partially offset by an 11.1% increase in footwear unit sales. During the three months ended March 31, 2014, revenue declines for the region were realized primarily in the wholesale channel which decreased $1.5 million, or 6.6%, compared to 2013. This decrease was mainly due to a soft wholesale market and slow sell-through of inventory as a result of macroeconomic declines. Partially offsetting this decrease in wholesale channel revenues was an increase of $0.2 million, or 2.2%, in our direct-to-consumer channel revenues which is primarily the result of the addition of six company-operated stores (net of store closures) since March 31, 2013. During the three months ended March 31, 2014, segment operating income decreased $1.1 million, or 14.5%, compared to 2013 driven predominately by the revenue decrease noted above, a $0.5 million unfavorable impact from foreign currency fluctuations and a decrease in segment gross margins of 220 basis points, or 4.0%. Partially offsetting these decreases was a $0.3 million, or 2.8%, decrease in selling, general and administrative expenses compared to 2013.

Europe Operating Segment. During the three months ended March 31, 2014, revenues from our Europe segment increased $2.8 million, or 4.5%, compared to 2013 primarily due to a 5.2% increase in footwear units sold. This increase was partially offset by a 0.7% decrease in average footwear selling price. In addition to sales metrics, our Europe segment realized a $2.5 million favorable impact from foreign currency fluctuations on segment revenues driven by the strengthening of the Euro and British Pound Sterling, which was partially offset by a $0.8 million unfavorable impact from foreign currency fluctuations on segment revenues as a result of the sudden weakening of the Russian Ruble against the U.S. Dollar throughout the quarter due to political uncertainty. During the three months ended March 31, 2014, we realized revenue growth in the region in all three channels compared to 2013 despite the impact of the Easter holiday moving from March in 2013 to April in 2014. Our direct-to-consumer channel revenues increased $1.5 million, or 10.4%, primarily due to the addition of 15 company-operated stores (net of store closures) since March 31, 2013 coupled with a 0.6% increase in comparable store sales on a constant currency basis and increased internet conversion rates. Our wholesale channel revenue increased $1.2 million, or 2.7%, primarily due to the expansion in our number of wholesale doors leading to improved backlog sales. During the three months ended March 31, 2014, segment operating income decreased $5.1 million, or 40.5%, compared to 2013 driven predominately by a decrease in segment gross margins of 430 basis points, or 7.9%, and a $3.9 million, or 18.7%, increase in selling, general and administrative expenses as a result of the expansion of our retail channel, a legal contingency

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accrual of $1.4 million related to on-going litigation and a infrequent liability of $0.7 million related to the closure of certain retail locations. Partially offsetting this decrease was the revenue increase noted above and a $0.3 million favorable impact from foreign currency fluctuations.

Non-GAAP Financial Measures

In addition to financial measures presented on the basis of accounting principles generally accepted in the United States of America (“U.S. GAAP”), we present current period ‘adjusted results of operations’, which is a non-GAAP financial measure. Adjusted results of operations exclude the impact of items that management believes affect the comparability or underlying business trends in our condensed consolidated financial statements in the periods presented.

We also present certain information related to our current period results of operations in this Item 2 through “constant currency”, which is a non-GAAP financial measure and should be viewed as a supplement to our results of operations and presentation of reportable segments under U.S. GAAP. Constant currency represents current period results that have been restated using prior year average foreign exchange rates for the comparative period to enhance the visibility of the underlying business trends excluding the impact of foreign currency exchange rate fluctuations.

Management uses adjusted results of operations to assist in comparing business trends from period to period on a consistent basis without regard to the impact of non-GAAP adjustments in communications with the board of directors, stockholders, analysts and investors concerning our financial performance. We believe that these non-GAAP measures are used by, and are useful to, investors and other users of our financial statements in evaluating operating performance by providing better comparability between reporting periods because they provide an additional tool to evaluate our performance without regard to non-GAAP adjustments that may not be indicative of overall business trends. They also provide a better baseline for analyzing trends in our operations. We do not suggest that investors should consider these non-GAAP measures in isolation from, or as a substitute for, financial information prepared in accordance with U.S. GAAP.

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The following table is a reconciliation of our results of operations, the most directly comparable U.S. GAAP measures, to non-GAAP adjusted results of operations:

	Three Months Ended March 31,
	2014												2013
				Non-GAAP												Non-GAAP
				Adjustments												Adjustments
($ thousands, except per share data)	GAAP			Cash			Non-Cash			Non-GAAP			GAAP			Cash			Non-Cash			Non-GAAP
Revenues	$	312,429		$			$			$	312,429		$	311,656		$			$			$	311,656
Cost of sales	156,202			—			—			156,202			145,807			—			—			145,807
Gross profit	156,227									156,227			165,849									165,849
Gross margin	50.0		%							50.0		%	53.2		%							53.2		%
Selling, general and administrative expenses (“SG&A”)	139,405												128,199
Restructuring charges and expenses (1)				(3,645		)	—			(3,645		)				—			—			—
New ERP implementation (2)				(1,985		)	—			(1,985		)				(1,131		)	—			(1,131		)
Contingency accruals (3)				(1,422		)	—			(1,422		)				—			—
Store closure costs (4)				—			(675		)	(675		)				—			—			—
Depreciation and amortization (5)				—			(404		)	(404		)				—			(722		)	(722		)
SG&A				(7,052		)	(1,079		)	131,274						(1,131		)	(722		)	126,346
SG&A as a percentage of revenues	44.6		%							42.0		%	41.1		%							40.5		%
Income from operations	16,822			(7,052		)	(1,079		)	24,953			37,650			(1,131		)	(722		)	39,503
Foreign currency transaction losses, net	2,768			—			—			2,768			2,600			—			—			2,600
Interest income	(477		)	—			—			(477		)	(306		)	—			—			(306		)
Interest expense	191			—			—			191			209			—			—			209
Other income, net	(141		)	—			—			(141		)	(28		)	—			—			(28		)
Income before income taxes	14,481			(7,052		)	(1,079		)	22,612			35,175			(1,131		)	(722		)	37,028
Income tax expense	5,357			—			—			5,357			6,214			—			—			6,214
Net income	$	9,124		$	(7,052	)	$	(1,079	)	$	17,255		$	28,961		$	(1,131	)	$	(722	)	$	30,814
Net income per common share (exclusive of Series A preferred shares)
Diluted										$	0.19											$	0.35
Dividends on Series A preferred shares	$	2,133		$	—		$	—		$	2,133		$	—		$	—		$	—		$	—
Dividend equivalents on Series A preferred shares related to redemption value accretion and beneficial conversion feature	618			—			—			618			—			—			—			—
Net income attributable to common stockholders	$	6,373		$	(7,052	)	$	(1,079	)	$	14,504		$	28,961		$	(1,131	)	$	(722	)	$	30,814
Net income per common share:
Diluted	$	0.06								$	0.14		$	0.33								$	0.35

(1)       This relates to severance expenses, bonuses and consulting fees related to recent restructuring activities and our investment agreement with Blackstone.

(2)       This represents operating expenses related to the implementation of our new ERP system.

(3)       This represents certain legal contingency accruals.

(4)       This represents a non-cash liability recorded as a result of exit costs related to retail store restructuring.

(5)       This represents the add-back of accelerated depreciation and amortization on tangible and intangible items related to our current ERP system and supporting platforms that will no longer be utilized once the implementation of a new ERP is complete.

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Liquidity and Capital Resources

Cash Flows

Cash and cash equivalents at March 31, 2014 increased $94.7 million, or 29.9%, to $411.8 million compared to $317.1 million at December 31, 2013. The primary reason for this increase is the $182.2 million in net cash proceeds from our investment agreement with Blackstone Capital Partners VI L.P. (“Blackstone”). This increase was partially offset by strategic reinvestments into the business, including $15.3 million in net capital additions primarily related to our ERP system implementation and a $13.0 million repurchase of stock associated with board authorized repurchases.

We anticipate that cash flows from operations will be sufficient to meet the ongoing needs of our business for the next twelve months. In order to provide additional liquidity in the future and to help support our strategic goals, we issued Series A preferred stock to Blackstone on January 27, 2014 (see Sale of Preferred Stock below) and we have a revolving credit facility with a syndicate of lenders, including PNC Bank, National Association (“PNC”), which currently provides us with up to $100.0 million in borrowing capacity and matures in December 2017 (see Revolving Credit Facility below). Additional future financing may be necessary and there can be no assurance that, if needed, we will be able to secure additional debt or equity financing on terms acceptable to us or at all.

Sale of Preferred Stock

On January 27, 2014, we received approximately $182.2 million of proceeds for the sale of 200,000 shares of Series A preferred stock to Blackstone and its permitted transferees. The Series A preferred stock has an aggregate stated value of $200.0 million, or $1000 per share.

The Series A preferred stock ranks senior to our common stock with respect to dividend rights and rights on liquidation, winding-up and dissolution. Holders of Series A preferred stock are entitled to cumulative dividends payable quarterly in cash at a rate of 6% per annum as well as any dividends declared or paid on common stock and are entitled to vote together with the holders of common stock on an as-converted basis. As of March 31, 2014, accrued dividends amounted to $2.1 million, which were paid to Blackstone on April 1, 2014. The Series A preferred stock has several conversion features as well as redemption rights. The conversion rate is subject to customary anti-dilution and other adjustments subject to certain share caps and other restrictions. As of March 31, 2014, the Blackstone investment represented approximately 13.5% ownership of the Company.

Stock Repurchase Plan Authorizations

We continue to evaluate options to maximize the returns on our cash and maintain an appropriate capital structure, including, among other alternatives, repurchases of our common stock. Subject to certain restrictions on repurchases under our revolving credit facility, we have authorization to repurchase up to $350.0 million of our common stock. The number, price, structure and timing of the repurchases, if any, will be at our sole discretion and future repurchases will be evaluated by us depending on market conditions, liquidity needs and other factors. Share repurchases may be made in the open market or in privately negotiated transactions. The repurchase authorization does not have an expiration date and does not oblige us to acquire any particular amount of our common stock. The board of directors may suspend, modify or terminate the repurchase program at any time without prior notice.

During the three months ended March 31, 2014, we repurchased approximately 0.9 million shares at an average price of $14.94 for an aggregate price of approximately $13.0 million excluding related commission charges, under our publicly-announced repurchase plan. As of March 31, 2014, we had approximately $337.0 million available for repurchase under our repurchase authorization.

Revolving Credit Facility

On December 16, 2011, we entered into an Amended and Restated Credit Agreement, (as amended, the “Credit Agreement”) with the lenders named therein and PNC Bank, National Association (“PNC”), as a lender and administrative agent for the lenders.

On March 27, 2014, we entered into the Fourth Amendment to Amended and Restated Credit Agreement (the “Fourth Amendment”), pursuant to which certain terms of the Credit Agreement were amended. The Fourth Amendment primarily (i) alters the minimum fixed charge coverage ratio from 1.25 to 1.00 to a scaled quarterly ratio of 1.15 to 1.00 in the first and second quarters of 2014, 1.20 to 1.00 in the third and fourth quarters of 2014 and 1.25 to 1.00 at the end of each quarter thereafter, and (ii) amends certain definitions of the financial covenants to become more favorable to us.

The Credit Agreement enables us to borrow up to $100.0 million, with the ability to increase commitments to up to $125 million subject to certain conditions, and is currently set to mature on December 16, 2017. The Credit Agreement is available for working

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capital, capital expenditures, permitted acquisitions, reimbursement of drawings under letters of credit, and permitted dividends, distributions, purchases, redemptions and retirements of equity interests. Borrowings under the Credit Agreement are secured by all of our assets including all receivables, equipment, general intangibles, inventory, investment property, subsidiary stock and intellectual property. Borrowings under the Credit Agreement bear interest at a variable rate. For domestic rate loans, the interest rate is equal to the highest of (i) the daily federal funds open rate as quoted by ICAP North America, Inc. plus 0.5%, (ii) PNC’s prime rate and (iii) a daily LIBOR rate plus 1.0%, in each case there is an additional margin ranging from 0.25% to 1.00% based on certain conditions. For LIBOR rate loans, the interest rate is equal to a LIBOR rate plus a margin ranging from 1.25% to 2.00% based on certain conditions.

The Credit Agreement requires monthly interest payments with respect to domestic rate loans and at the end of each interest period with respect to LIBOR rate loans. The Credit Agreement further provides for a limit on the issuance of letters of credit to a maximum of $20.0 million. The Credit Agreement contains provisions requiring us to maintain compliance with certain restrictive and financial covenants.

As of March 31, 2014 and December 31, 2013, we had no outstanding borrowings under the Credit Agreement. As of March 31, 2014 and December 31, 2013, we had issued and outstanding letters of credit of $7.3 million and $7.2 million, respectively, which were reserved against the borrowing base under the terms of the Credit Agreement. As of March 31, 2014, we were in compliance with all restrictive financial covenants under the Credit Agreement.

Long-term Bank Borrowings

On December 10, 2012, we entered into a Master Installment Payment Agreement (“Master IPA”) with PNC in which PNC finances our purchase of software and services, which may include but are not limited to third party costs to design, install and implement software systems, and associated hardware described in the schedules defined within the Master IPA. The Master IPA was entered into to finance our implementation of a new enterprise resource planning (“ERP”) system which began in October 2012 and is estimated to continue through late 2014. The terms of each note payable under the Master IPA consist of variable interest rates and payment terms based on amounts borrowed and timing of activity throughout the implementation of the ERP system.

As of March 31, 2014 and December 31, 2013, we had $15.5 million and $16.8 million, respectively, of long-term debt outstanding under five separate notes payable under the Master IPA, of which $5.2 million and $5.1 million, respectively, represent current installments. As of March 31, 2014, the notes bear interest rates ranging from 2.45% to 2.79% and maturities ranging from September 2016 to September 2017. As this debt arrangement relates solely to the construction and implementation of an ERP system for use by the entity, all interest expense incurred under the arrangement has been capitalized to the condensed consolidated balance sheets until the assets are ready for intended use and will be amortized over the useful life of the software upon that date. During the three months ended March 31, 2014 and 2013, we capitalized $0.1 million and $0.0 million, respectively, in interest expense related to this debt arrangement to the condensed consolidated balance sheets.

Working Capital

As of March 31, 2014, accounts receivable increased $101.8 million, or 97.5%, to $206.2 million as compared to $104.4 million at December 31, 2013, which is primarily the result of seasonality as first quarter wholesale revenues increase in comparison to fourth quarter revenues in anticipation for spring and summer product delivery.

As of March 31, 2014, inventories increased $30.0 million, or 18.5%, to $192.4 million as compared to $162.3 million at December 31, 2013, which is primarily the result of seasonality as we increase our inventory for spring and summer demand as well as the impact of the Easter holiday shift.

Capital Assets

During the three months ended March 31, 2014, net capital expenditures acquired, inclusive of intangible assets, decreased to $15.5 million compared to $16.5 million in 2013 primarily due to a reduction in global retail store expansion partially offset by an increase in capitalization of our ERP implementation costs.

We have entered into various operating leases that require cash payments on a specified schedule. Over the next five years we are committed to make payments of approximately $249.8 million related to our operating leases. We plan to continue to enter into operating leases related to our retail stores; however, we plan to reduce our overall retail expansion in 2014. We also continue to evaluate cost reduction opportunities. Our evaluation of cost reduction opportunities will include an evaluation of contracts for sponsorships, operating lease contracts and other contracts that require future minimum payments resulting in fixed operating costs. Any changes to these contracts may require early termination fees or other charges that could result in significant cash expenditures.

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Repatriation of Cash

As we are a global business, we have cash balances which are located in various countries and are denominated in various currencies. Fluctuations in foreign currency exchange rates impact our results of operations and cash positions. Future fluctuations in foreign currencies may have a material impact on our cash flows and capital resources. Cash balances held in foreign countries may have additional restrictions and covenants associated with them which could adversely impact our liquidity and ability to timely access and transfer cash balances between entities.

We generally consider unremitted earnings of subsidiaries operating outside of the U.S. to be indefinitely reinvested; however, our board of directors recently approved a foreign cash repatriation strategy. As part of this strategy, we have repatriated approximately $90.0 million for which income taxes have already been accrued for or paid. Further cash repatriation will depend on future cash requirements in the U.S. We maintain approximately $52.0 million of foreign earnings for which tax has previously been provided, and which has not been repatriated at this time.

Most of the cash balances held outside of the U.S. could be repatriated to the U.S., but under current law, would be subject to U.S. federal and state income taxes less applicable foreign tax credits. In some countries, repatriation of certain foreign balances is restricted by local laws and could have adverse tax consequences if we were to move the cash to another country. Certain countries, including China, have monetary laws which may limit our ability to utilize cash resources in those countries for operations in other countries. These limitations may affect our ability to fully utilize our cash resources for needs in the U.S. or other countries and could adversely affect our liquidity. As of March 31, 2014, we held $212.9 million of our total $411.8 million in cash in international locations. This cash is primarily used for the ongoing operations of the business in the locations in which the cash is held. Of the $212.9 million, $1.2 million could potentially be restricted, as described above. If the remaining $211.7 million were to be immediately repatriated to the U.S., we would be required to incur approximately $36.1 million in taxes that were not previously provided for in our consolidated statement of operations.

Contractual Obligations

In February 2011, we renewed and amended our supply agreement with Finproject S.r.l. which provides us the exclusive right to purchase certain raw materials used to manufacture our products. The agreement also provides that we meet minimum purchase requirements to maintain exclusivity throughout the term of the agreement, which expires December 31, 2014. Historically, the minimum purchase requirements have not been onerous and we do not expect them to become onerous in the future. Depending on the material purchased, pricing is either based on contracted price or is subject to quarterly reviews and fluctuates based on order volume, currency fluctuations and raw material prices. Pursuant to the agreement, we guarantee the payment for certain third-party manufacturer purchases of these raw materials up to a maximum potential amount of €3.5 million (approximately $4.8 million as of March 31, 2014), through a letter of credit that was issued to Finproject S.r.l.

The following table summarizes aggregate information about our significant contractual cash obligations as of March 31, 2014:

	Payments due by period
			Less than		1 - 3		3 - 5		More than
($ thousands)	Total		1 year		years		years		5 years
Operating lease obligations (1)	$	380,968	$	71,934	$	107,057	$	70,850	$	131,127
Inventory purchase obligations with third party manufacturers (2)	210,385		210,385		—		—		—
Dividends payable (3)	96,000		11,133		24,000		24,000		36,867
Other contracts (4)	84,392		13,554		22,291		12,317		36,230
Debt obligations (5) (9)	16,177		5,525		9,759		893		—
Estimated liability for uncertain tax positions (6)	6,306		—		6,306		—		—
Minimum licensing royalties (7)	4,378		1,335		2,049		994		—
Capital lease obligations (8) (9)	65		40		25		—		—
Total	$	798,671	$	313,906	$	171,487	$	109,054	$	204,224

(1)   Our operating lease obligations consist of retail stores, offices, warehouses, vehicles, and equipment expiring at various dates through 2033. This balance represents the minimum cash commitment under contract to various third-parties for operating lease obligations including the effect of rent escalation clauses, deferred rent and minimum sublease rentals due in the future under non-cancelable subleases. This balance does not include certain contingent rent clauses that may require additional rental amounts based on sales volume, inventories, etc. as these amounts are not determinable for future periods.

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(2)  Our inventory purchase obligations with third party manufacturers consist of open purchase orders for footwear products and includes an immaterial amount of purchase commitments with certain third-party manufacturers for yet-to-be-received finished product where title passes to us upon receipt. All purchase obligations with third party manufacturers are expected to be paid within one year.

(3)  Dividends payable are associated with our investment agreement with Blackstone at a rate of 6.0% the stated value of the investment. The amounts represent expected dividend payments over the eight year redemption accretion period.

(4)  Other contracts consist of various agreements with third-party providers.

(5)  We have entered into an agreement with PNC to finance the purchase of software and services related to the implementation of our new ERP system, which began in October 2012 and is expected to continue into late 2014. Our current debt obligations consist of five separate notes issued under the agreement, which bear interest rates ranging from 2.45% to 2.79% and maturities ranging from September 2016 to September 2017.

(6)  Our estimated liability for uncertain tax positions are unrecognized tax benefits taken in our income tax return that would reduce our effective tax rate, if recognized.  As of March 31, 2014, we had gross unrecognized tax benefits recorded in non-current liabilities of $31.2 million and an additional $5.3 million in gross interest and penalties. Of the $31.2 million, we expect approximately $6.3 million to be paid within less than a year. Of the remaining $24.9 million uncertain tax liabilities, we are unable to make a reasonable estimate of the timing of payments in individual years and therefore, such amounts are not included in the contractual obligation table above.

(7)  Our minimum licensing royalties consist of usage-based payments for the right to use various licenses, trademarks and copyrights in the production of our footwear, apparel and accessories. Royalty obligations are based on minimum guarantees under contract; however, may include additional royalty obligations based on sales volume that are not determinable for future periods.

(8)  Our capital lease obligations consist of office equipment expiring at various dates through 2016. This balance represents the minimum cash commitment under contract to various third-parties for capital lease obligations.

(9)  Amounts include anticipated interest payments.

Off-Balance Sheet Arrangements

We had no material off balance sheet arrangements as of March 31, 2014.

Seasonality

Due to the seasonal nature of our footwear which is more heavily focused on styles suitable for warm weather, revenues generated during our first and fourth quarters are typically less than revenues generated during our second and third quarters, when the northern hemisphere is experiencing warmer weather. We continue to expand our product line to include more winter-oriented styles to mitigate some of the seasonality of our revenues. Our quarterly results of operations may also fluctuate significantly as a result of a variety of other factors, including the timing of new model introductions or general economic or consumer conditions. Accordingly, results of operations and cash flows for any one quarter are not necessarily indicative of results to be expected for any other quarter or for any other year.

Critical Accounting Policies and Estimates

For a discussion of accounting policies that we consider critical to our business operations and understanding of our results of operations, and that affect the more significant judgments and estimates used in the preparation of our unaudited condensed consolidated financial statements, see Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Critical Accounting Policies and Estimates” contained in our Annual Report on Form 10-K for the year ended December 31, 2013 and incorporated by reference herein.

ITEM 3.  Quantitative and Qualitative Disclosures about Market Risk

Interest Rate Risk

We centrally manage our debt and investment portfolios considering investment opportunities and risks, tax consequences and overall financing strategies. Our exposure to market risk includes interest rate fluctuations in connection with our revolving credit facility and certain financial instruments. In addition to the revolving credit facility, we have incurred short- and long-term indebtedness related to the implementation of our ERP system. Borrowings under these debt instruments bear fixed interest rates and therefore, do not have the potential for market risk.

Borrowings under the revolving credit facility bear interest at a variable rate. For domestic rate loans, the interest rate is equal to the highest of (i) the daily federal funds open rate as quoted by ICAP North America, Inc. plus 0.5%, (ii) PNC’s prime rate and (iii) a daily LIBOR rate plus 1.0%, in each case there is an additional margin ranging from 0.25% to 1.00% based on certain conditions. For LIBOR rate loans, the interest rate is equal to a LIBOR rate plus a margin ranging from 1.25% to 2.00% based on certain conditions. Borrowings under the revolving credit facility are therefore subject to risk based upon prevailing market interest rates. Interest rates fluctuate as a result of many factors, including governmental monetary and tax policies, domestic and international economic and political considerations and other factors that are beyond our control. During the three months ended March 31, 2014, we did not borrow on our revolving credit facility and had no outstanding borrowings as of March 31, 2014.

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We additionally hold cash equivalents including certificate of deposits, time deposits and money market funds. Interest income generated from these cash equivalents will fluctuate with the general level of interest rates. As of March 31, 2014, we held $118.9 million in cash equivalents subject to variable interest rates. If the prevailing market interest rates relative to these investments increased 10% during the three months ended March 31, 2014, there would not have been a material impact on interest income.

Foreign Currency Exchange Risk

As a global company, we have significant revenues and costs denominated in currencies other than the U.S. Dollar. We pay the majority of expenses attributable to our foreign operations in the functional currency of the country in which such operations are conducted and pay the majority of our overseas third-party manufacturers in U.S. Dollars. Our ability to sell our products in foreign markets and the U.S. Dollar value of the sales made in foreign currencies can be significantly influenced by foreign currency fluctuations. Fluctuations in the value of foreign currencies relative to the U.S. Dollar could result in downward price pressure for our products and increase losses from currency exchange rates. An increase of 1% in value of the U.S. Dollar relative to foreign currencies would have decreased income before taxes during the three months ended March 31, 2014 by approximately $0.9 million. The volatility of the applicable exchange rates is dependent on many factors that cannot be forecasted with reliable accuracy. In the event our foreign sales and purchases increase and are denominated in currencies other than the U.S. Dollar, our operating results may be affected by fluctuations in the exchange rate of currencies we receive for such sales. See Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” for a discussion of the impact of foreign exchange rate variances experienced during the three months ended March 31, 2014.

We transact business in various foreign countries and are therefore exposed to foreign currency exchange rate risk inherent in revenues, costs, and monetary assets and liabilities denominated in non-functional currencies. We have entered into foreign currency exchange forward contracts and currency swap derivative instruments to selectively protect against volatility in the value of non-functional currency denominated monetary assets and liabilities, and of future cash flows caused by changes in foreign currency exchange rates.

The following table summarizes the notional amounts of the outstanding foreign currency exchange contracts at March 31, 2014 and December 31, 2013. The notional amounts of the derivative financial instruments shown below are denominated in their U.S. dollar equivalents and represent the amount of all contracts of the foreign currency specified. These notional values do not necessarily represent amounts arties and, therefore, are not a direct measure of our exposure to the foreign currency exchange risks.

	March 31,		December 31,
($ thousands)	2014		2013
Foreign currency exchange forward contracts by currency:
Japanese Yen	$	67,413	$	68,707
Euro	52,850		38,577
Russian Ruble	38,754		17,588
British Pound Sterling	36,702		15,487
South Korean Won	34,867		12,100
Singapore Dollar	25,200		28,225
Mexican Peso	18,125		18,350
Australian Dollar	12,689		4,941
New Taiwan Dollar	8,779		3,463
South African Rand	7,746		3,076
Indian Rupee	5,525		2,150
Canadian Dollar	4,972		3,428
Hong Kong Dollar	3,533		1,844
New Zealand Dollar	2,468		943
Swedish Krona	2,222		1,615
Norwegian Krone	388		—
Total notional value, net	$	322,233	$	220,494
Latest maturity date	May 2014		December 2015

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ITEM 4.  Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Under the supervision of and with the participation of our senior management, including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, as of March 31, 2014 (the “Evaluation Date”). Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that as of the Evaluation Date, our disclosure controls and procedures were effective, such that the information relating to us, including our consolidated subsidiaries, required to be disclosed in our Securities and Exchange Commission (“SEC”) reports (i) is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and (ii) is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

Changes in Internal Control over Financial Reporting

There have been no changes to our internal control over financial reporting during the three months ended March 31, 2014 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II — Other Information

Item 1. Legal Proceedings

We and certain current and former officers and directors have been named as defendants in complaints filed by investors in the United States District Court for the District of Colorado. The first complaint was filed in November 2007 and several other complaints were filed shortly thereafter. These actions were consolidated and, in September 2008, the district court appointed a lead plaintiff and counsel. An amended consolidated complaint was filed in December 2008. The amended complaint purports to state claims under Sections 10(b), 20(a), and 20A of the Exchange Act on behalf of a class of all persons who purchased our common stock between April 2, 2007 and April 14, 2008 (the “Class Period”). The amended complaint also added our independent auditor as a defendant. The amended complaint alleges that, during the Class Period, the defendants made false and misleading public statements about us and our business and prospects and, as a result, the market price of our common stock was artificially inflated. The amended complaint also claims that certain current and former officers and directors traded in our common stock on the basis of material non-public information. The amended complaint seeks compensatory damages on behalf of the alleged class in an unspecified amount, including interest, and also added attorneys’ fees and costs of litigation. On February 28, 2011, the District Court granted motions to dismiss filed by the defendants and dismissed all claims. A final judgment was thereafter entered. Plaintiffs subsequently appealed to the United States Court of Appeals for the Tenth Circuit. We and those current and former officers and directors named as defendants have entered into a Stipulation of Settlement with the plaintiffs that would, if approved by the United States District Court for the District of Colorado, resolve all claims asserted against us by the plaintiffs on behalf of the putative class, and plaintiffs’ appeal would be dismissed. Our independent auditor is not a party to the Stipulation of Settlement. The Stipulation of Settlement received preliminary approval from the District Court on August 28, 2013. It remains subject to customary conditions, including final court approval following notice to stockholders. On February 13, 2014 a final settlement hearing took place and the parties are awaiting a ruling in conjunction with the same. If the settlement becomes final, all amounts required by the settlement will be paid by our insurers. There can be no assurance that the settlement will be finally approved by the District Court, or that approval by the District Court will, if challenged, be upheld by the Tenth Circuit.

On October 27, 2010, Spectrum Agencies (“Spectrum”) filed suit against our subsidiary, Crocs Europe B.V. (“Crocs Europe”), in the High Court of Justice, Queen’s Bench Division, Royal Courts of Justice in London, United Kingdom (“UK”). Spectrum acted as an agent for Crocs products in the UK from 2005 until Crocs Europe terminated the relationship on July 3, 2008 due to Spectrum’s breach of its duty to act in good faith towards Crocs Europe. Spectrum alleges that Crocs Europe unlawfully terminated the agency relationship and failed to pay certain sales commissions. A trial on the liability, not quantum (compensation and damages), was held at the High Court in London from November 30, 2011 to December 5, 2011. On December 16, 2011, the High Court of Justice issued a judgment that found that although Spectrum’s actions were a breach of its duty to act in good faith towards Crocs Europe the breach was not sufficiently severe to justify termination. We believe that the trial judge erred in his findings and subsequently appealed the judgment.  On October 30, 2012, the Court of Appeal handed down its judgment confirming the trial judge’s findings. We submitted a request to the Supreme Court seeking permission to appeal.  On April 24, 2013 the Supreme Court declined to grant permission to appeal.  Given that to date the legal proceedings in this case have only addressed liability, there have been no findings in relation to the amount of compensation or damages other than with respect to legal fees. Under English law, the prevailing party is entitled to reimbursement of reasonable legal fees incurred in the proceedings. We expect that Spectrum will now request to move to the damages phase via a case management conference, during which the Court will provide instructions and schedules leading up to the trial on damages.  Spectrum has not formally filed a court claim for compensation and damages and the amount will be assessed later in the proceedings.  A trial and judgment on damages could take up to 12 months.

We are currently subject to an audit by U.S. Customs & Border Protection (“CBP”) in respect of the period from 2006 to 2010.  In October 2013, CBP issued a revised final audit report. In that report CBP projects that unpaid duties totaling approximately $12.4 million are due for the period under review (a reduction from $14.3 million in the preliminary draft report issued in 2012).  We have responded that these projections are erroneous and provided arguments that demonstrate the amount due in connection with this matter is considerably less than the projection.  It is not possible at this time to predict whether our arguments will be successful in eliminating or reducing the amount in dispute.  CBP has stated that the final report will recommend collection of the duties due.  At this time, it is not possible to determine precisely when a notice of claim will be received from CBP, but currently we anticipate a notice of claim could be received sometime in the second or third quarter of 2014.  Likewise, it is not possible to predict with any certainty whether CBP will seek to assert a claim for penalties in addition to any unpaid duties, but such an assertion is a possibility.

Mexico’s Federal Tax Authority (“SAT”) audited the period from January 2006 to July 2011.  There were two phases to the audit, the first for capital equipment and finished goods and the second for raw materials.  The first phase was completed and no major discrepancies were noted by the SAT.  On January 9, 2013, Crocs received a notice for the second phase in which the SAT issued a tax assessment (taxes and penalties) of roughly 280.0 million pesos (approximately $22.0 million) based on the value of all of Crocs’ imported raw materials during the audit period.  We believe that the proposed penalty amount is unfounded and without merit. With the help of local counsel we filed an appeal by the deadline of March 15, 2013.  We have argued that the amount due in connection with the matter, if any, is substantially less than that proposed by the SAT.  In connection with the appeal, the SAT required us to post

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an appeal surety bond in the amount of roughly 321.0 million pesos (approximately $26.0 million), which amount reflects estimated additional penalties and interest if we are not successful on our appeal.  This amount will be adjusted on an annual basis. We expect it to take between two and three years for resolution of this matter in the Mexican courts.  It is not possible at this time to predict the outcome of this matter or reasonably estimate any potential loss.

Although we are subject to other litigation from time to time in the ordinary course of business, including employment, intellectual property and product liability claims, we are not party to any other pending legal proceedings that we believe will have a material adverse impact on our business, financial position, results of operations or cash flows.

ITEM 1A.  Risk Factors

There have been no material changes to the risk factors contained in our Annual Report on Form 10-K for the year ended December 31, 2013.

ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds

ISSUER PURCHASES OF EQUITY SECURITIES

				Total Number of	Approximate Dollar
	Total Number	Average		Shares (or Units)	Value of Shares that
	of Shares	Price Paid		Purchased as Part of	May Yet Be
	(or Units)	per Share		Publicly Announced	Purchased Under the Plan
Period	Purchased	(or Unit)		Plans or Programs	Programs (in thousands) (1)
January 1, 2014—January 31, 2014	—	$	—	—	$	350,000
February 1, 2014—February 28, 2014	—	—		—	350,000
March 1, 2014—March 31, 2014	870,470	14.94		870,470	336,995
Total	870,470	$	14.94	870,470	$	336,995

(1)On December 26, 2013, the board of directors approved the repurchase of up to $350.0 million of our common stock, which was announced on December 30, 2013. This authorization effectively replaced our previous stock repurchase authorizations. During the three months ended March 31, 2014, we repurchased approximately 0.9 million shares at a weighted-average price of $14.94 for an aggregate price of approximately $13.0 million excluding related commission charges, under our publicly-announced repurchase plan. As of March 31, 2014, approximately $337.0 million of shares remained available for repurchase under our share repurchase authorization. The number, price, structure and timing of the repurchases, if any, will be at our sole discretion and future repurchases will be evaluated by us depending on market conditions, liquidity needs and other factors. Share repurchases may be made in the open market or in privately negotiated transactions. The repurchase authorization does not have an expiration date and does not oblige us to acquire any particular amount of our common stock. The board of directors may suspend, modify or terminate the repurchase program at any time without prior notice.

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ITEM 6.  Exhibits

Exhibit Number	Description
3.1	Restated Certificate of Incorporation of Crocs, Inc. (incorporated herein by reference to Exhibit 4.1 to Crocs, Inc.’s Registration Statement on Form S-8, filed on March 9, 2006 (File No. 333-132312)).
3.2	Certificate of Amendment to the Restated Certificate of Incorporation of Crocs, Inc. (incorporated herein by reference to Exhibit 3.1 to Crocs, Inc.’s Current Report on Form 8-K, filed on July 12, 2007).
3.3	Amended and Restated Bylaws of Crocs, Inc. (incorporated herein by reference to Exhibit 4.2 to Crocs, Inc.’s Registration Statement on Form S-8, filed on March 9, 2006 (File No. 333-132312)).
3.4	Certificate of Designations of Series A Convertible Preferred Stock of Crocs, Inc. (incorporated herein by reference to Exhibit 3.1 to Crocs, Inc.’s Current Report on Form 8-K, filed on January 27, 2014).
4.1	Specimen common stock certificate (incorporated herein by reference to Exhibit 4.2 to Crocs, Inc.’s Amendment No. 4 to Registration Statement on Form S-1, filed on January 19, 2006 (File No. 333-127526)).
10.1††	Crocs, Inc. Change of Control Plan (as Amended and Restated).
10.2††	Fourth Amendment to Amended and Restated Credit Agreement, dated March 27, 2014, among Crocs, Inc., Crocs Retail, LLC, Ocean Minded, Inc., Jibbitz, LLC, Bite, Inc., the lenders named therein and PNC Bank, National Association, as a lender and administrative agent.
10.3	First Amendment to Investment Agreement, dated January 27, 2014, between Crocs, Inc. and Blackstone Capital Partners VI L.P. (incorporated herein by reference to Exhibit 10.1 to Crocs Inc.’s Current Report on Form 8-K, filed on January 27, 2014).
10.4	Registration Rights Agreement, dated January 27, 2014, among Crocs, Inc. and the persons named on Schedule 1 thereto (incorporated herein by reference to Exhibit 10.2 to Crocs, Inc.’s Current Report on Form 8-K, filed on January 27, 2014).
31.1††	Certification of the Chief Executive Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act.
31.2††	Certification of the Chief Financial Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act.
32††	Certification of the Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act.
101.INS††	XBRL Instance Document
101.SCH††	XBRL Taxonomy Extension Schema Document
101.CAL††	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF††	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB††	XBRL Taxonomy Extension Label Linkbase Document
101.PRE††	XBRL Taxonomy Extension Presentation Linkbase Document

††Filed herewith.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	CROCS, INC.
Date: April 30, 2014	By:	/s/ Jeffrey J. Lasher
		Name:	Jeffrey J. Lasher
		Title:	Senior Vice President-Finance and Chief Financial Officer

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EX-10.1

Exhibit 10.1

CROCS, INC.
CHANGE IN CONTROL PLAN
(As Amended and Restated Effective as of March 2014)

ARTICLE I
PURPOSE, ESTABLISHMENT AND APPLICABILITY OF THE PLAN

1.1Establishment of the Plan

Crocs, Inc. (the “Company”) established this Change in Control Plan (the “Plan”) effective as of June 13, 2013 (the “Effective Date”), and amended and restated the Plan effective as of March 2014.

1.2Purpose of the Plan

The Plan is intended to ensure that the Company will have the continued dedication of certain key employees of the Company, notwithstanding the possibility or occurrence of a Change in Control (as defined below), to diminish the distraction of such employees that may occur by virtue of the personal uncertainties and risks created by a potential or actual Change in Control, to encourage such employees’ full attention and dedication to the Company currently and in the event of any potential or actual Change in Control, and to provide such employees with compensation and benefits arrangements upon a Change in Control that are competitive with those of other peer corporations.

1.3Applicability of the Plan

Subject to the terms of the Plan, the benefits provided by the Plan shall be available to all those Employees who, on or after the Effective Date, have entered into a Participation Agreement.

1.4Contractual Right to Benefits

The Plan establishes and vests in each Participant (as defined below) a contractual right to the benefits to which the Participant is entitled pursuant to the terms and conditions thereof, enforceable by the Participant against the Company.

ARTICLE II
DEFINITIONS

Whenever used in the Plan, the following terms shall have the meanings set forth below.

(a)“Affiliate.”  When used with respect to any Person, any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such Person.

(b)“Annual Bonus.”  An amount equal to the greater of (i) the Participant’s target annual bonus for the fiscal year during which the Change in Control occurs and (ii) the average of the annual bonus payments actually made to the Participant with respect to the three (3) fiscal years completed prior to the fiscal year during which the Change in Control occurs (or, if the Participant was not employed during all three (3) of such fiscal years, the number of fiscal years in which the Participant was employed).

(c)“Base Salary.”  An amount equal to the Participant’s gross annual base salary at the rate in effect immediately prior to a Change in Control.

(d)“Board.”  The Board of Directors of the Company.

(e)“Cause.”  With respect to any Participant:  (i) the Participant’s conviction of, or guilty or no contest plea to, any felony; (ii) any act of fraud by the Participant related to or connected with the Participant’s employment by the Company; (iii) the Participant’s material breach of his or her fiduciary duty to the Company; (iv) the Participant’s gross negligence or gross misconduct in the performance of duties reasonably assigned to the Participant which causes material harm to the Company; (v) any willful violation by the Participant of the Company’s codes of conduct or other rules or policies of the Company; or (vi) any entry of any court order or other ruling that prevents the Participant from performing his or her material duties and responsibilities hereunder.

(f)“Change in Control.”  A Change in Control of the Company shall be deemed to have occurred as of the first day that any one or more of the following conditions have been satisfied:

(i)An acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934 (the “Exchange Act”)) (a “Person”) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of thirty-five percent (35%) or more of either (A) the then outstanding shares of common stock of the Company (the “Outstanding Company Common Stock”) or (B) the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors (the “Outstanding Company Voting Securities”); excluding, however, the following acquisitions of Outstanding Company Common Stock and Outstanding Company Voting Securities:  (1) any acquisition directly from the Company, other than an acquisition by virtue of the exercise of a conversion privilege unless the security being so converted was itself acquired directly from the Company, (2) any acquisition by the Company, (3) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company, or (4) any acquisition by any Person pursuant to a transaction that complies with clauses (A), (B) and (C) of Section 2(f)(iii); or

(ii)During any consecutive twenty-four (24) month period, the individuals who, at the beginning of such period, constitute the Board (the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board; provided, however, that

2

any individual who becomes a member of the Board subsequent to such period whose election, or nomination for election by the Company’s stockholders, was approved by a vote of at least a majority of directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board; but, provided, further, that any such individual whose initial assumption of office occurs as a result of either an actual or threatened election contest (as such terms are used in Rule 14a-11 of Regulation 14A promulgated under the Exchange Act) or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board shall not be so considered as a member of the Incumbent Board; or

(iii)The consummation of a reorganization, merger or consolidation or sale or other disposition of all or substantially all of the assets of the Company (“Business Combination”); excluding, however, such a Business Combination pursuant to which

(A)all or substantially all of the individuals and entities who are the beneficial owners, respectively, of the Outstanding Company Common Stock and Outstanding Company Voting Securities immediately prior to such Business Combination shall beneficially own, directly or indirectly, more than fifty percent (50%) of, respectively, the outstanding shares of common stock, and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the corporation resulting from such Business Combination (including, without limitation, a corporation that as a result of such transaction owns the Company or all or substantially all of the Company’s assets) in substantially the same proportions as their ownership, immediately prior to such Business Combination, of the Outstanding Company Common Stock and Outstanding Company Voting Securities, as the case may be,

(B)no Person (other than any employee benefit plan (or related trust) sponsored or maintained by the Company or any entity controlled by the Company or such corporation resulting from such Business Combination) shall beneficially own, directly or indirectly, thirty-five percent (35%) or more of, respectively, the outstanding shares of common stock of the corporation resulting from such Business Combination or the combined voting power of the outstanding voting securities of such corporation entitled to vote generally in the election of directors, except to the extent that such ownership existed with respect to the Company prior to the Business Combination, and

(C)at least a majority of the members of the board of directors of the corporation resulting from such Business Combination shall have been members of the Incumbent Board at the time of the execution of the initial agreement, or of the action of the Board, providing for such Business Combination; or

(iv)Approval by stockholders of a complete liquidation or dissolution of the Company.

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(g)“Change in Control Benefits.”  The benefits described in Section 4.1 that are provided to qualifying Participants under the Plan.

(h)“COBRA.”  The health continuation provisions set forth in Code Section 4980B or Part 6 of Subtitle B of Title I of ERISA.

(i)“Code.”  The Internal Revenue Code of 1986, as amended from time to time.

(j)“Company.”  Crocs, Inc. and any successor thereto.

(k)“Company-Paid Coverage.”  The benefits coverage described in Section 4.1.3 or 4.1.4.

(l)“Compensation Committee.”  The Compensation Committee of the Board.

(m)“Disability.”  Either (i) any severe medically determinable physical impairment that renders the Participant unable to function, such as the Participant’s being in a coma, from which a physician with relevant and appropriate expertise has given his medical opinion that the Participant will not recover within six (6) months; or (ii) the Participant’s inability because of mental or physical illness or incapacity, whether total or partial, to perform the Participant’s duties for a continuous period of one hundred and twenty (120) days, or for shorter periods aggregating one hundred and twenty (120) days out of any one hundred and eighty (180) day period.

(n)“Employee.”  Any full-time employee of the Company.

(o)“ERISA.”  The Employee Retirement Income Security Act of 1974, as amended from time to time.

(p)“Good Reason.”  The existence of any one or more of the following conditions without the Participant’s written consent:

(i)the Company’s assignment to the Participant of any duties inconsistent in any material negative respect with the Participant’s authority, duties or responsibilities as in effect immediately prior to the Change in Control, or any other action by the Company that results in a material diminution in such authority, duties or responsibilities or as a result of which the Participant no longer has the authority, duties or responsibilities substantially equivalent to (or better than) the Participant’s authority, duties or responsibilities immediately prior to the Change in Control;

(ii)a material reduction by the Company in the Participant’s base salary, as determined by taking into account the base salary in effect immediately prior to the Change in Control (and as may have been increased after the date of the Change in Control); for the avoidance of doubt, the reduction of the Participant’s base salary by more than ten percent (10%) in the aggregate in any two (2) year period shall be deemed a material reduction for purposes of this clause (ii);

4

(iii)a material reduction by the Company in the Participant’s target bonus opportunity and/or target long-term incentive opportunity, as determined by taking into account each opportunity in effect immediately prior to the Change in Control (and as may have been increased after the date of the Change in Control); for the avoidance of doubt, the reduction of the Participant’s target bonus opportunity by more than ten percent (10%) in the aggregate in any two (2) year period and/or the reduction of the Participant’s target long-term incentive opportunity by more than ten percent (10%) in the aggregate in any two (2) year period shall be deemed a material reduction for purposes of this clause (iii);

(iv)a requirement by the Company that the Participant be based at any office or location more than fifty (50) miles from the Company’s principal office immediately prior to the Change in Control; or

(v)the material breach by the Company of the Plan.

Notwithstanding any other provision of the Plan to the contrary, a Participant shall not be deemed to have terminated his or her employment for Good Reason unless (i) the Participant notifies the Company in writing of the condition that the Participant believes constitutes Good Reason within ninety (90) days of the initial existence thereof (which notice specifically identifies such condition and the details regarding its existence), (ii) the Company fails to remedy such condition within thirty (30) days after the date on which it receives such notice (the “Remedial Period”), and (iii) the Participant terminates employment with the Company (and its Subsidiaries and Affiliates) within sixty (60) days after the end of the Remedial Period.  The failure by the Participant to include in the notice any fact or circumstance that contributes to a showing of Good Reason shall not waive any right of the Participant hereunder or preclude the Participant from asserting such fact or circumstance in enforcing his or her rights hereunder.

(q)“Participant.”  An individual who qualifies as such pursuant to Section 3.1.

(r)“Participation Agreement.”  The Participation Agreement in substantially the form attached hereto as Annex A, executed by and between the Participant and the Company as a condition to the Participant’s receipt of the Change in Control Benefits.

(s)“person.”  Any individual, corporation, partnership, joint venture, association, joint stock company, trust, unincorporated organization, governmental authority or any other entity.

(t)“Plan.”  The Crocs, Inc. Change in Control Plan.

(u)“Release.”  The release of claims described in Section 3.3, which must be executed (and not revoked) by the Participant as a condition to receiving a Severance Payment and Company-Paid Coverage.

(v)“Section 409A.”  Code Section 409A, and the rules and regulations issued thereunder.

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(w)“Severance Payment.”  The payment of cash severance compensation as provided in Section 4.1.2.

(x)“Severance Payment Percentage.”  For each Participant, the Severance Payment Percentage set forth in such Participant’s Participation Agreement.

(y)“Subsidiary.”  Any corporation in which the Company, directly or indirectly, holds a majority of the voting power of such corporation’s outstanding shares of capital stock.

ARTICLE III
ELIGIBILITY

3.1Participation

The Company shall notify each eligible Employee of his or her selection for participation in the Plan by providing a Participation Agreement setting forth the Severance Payment Percentage for the eligible Employee and such other terms, provisions and conditions not inconsistent with the Plan as shall be determined by the Compensation Committee.  Participation shall be effective upon an eligible Employee’s delivering a properly signed Participation Agreement.  Notwithstanding the foregoing, a Participant shall not be entitled to receive Change in Control Benefits (or any other benefits under the Plan) if the Participant has entered into an agreement with the Company that provides for benefits similar to the Change in Control Benefits in the event of a Change in Control, unless such agreement or the Participant’s Participation Agreement specifically provides otherwise.

3.2Duration of Participation

A Participant shall cease to be a Participant in the Plan as a result of an amendment or termination of the Plan complying with Article VI or when the Participant ceases to be an Employee, other than under circumstances that entitle the Participant to Change in Control Benefits.

3.3Release

A Participant’s right to receive the Severance Payment and the Company-Paid Coverage is subject to and contingent upon the Participant’s timely execution, without subsequent revocation, of a Release of claims in a form reasonably satisfactory to the Company.  To be timely, the Release must become effective (i.e., the Participant must sign it and any revocation period must expire without the Participant’s revoking the Release) within sixty (60) days, or such shorter period specified in the Release, after the Participant’s date of termination of employment.  If the Release does not become effective within such time period, then the Participant shall not be entitled to the Severance Payment or the Company-Paid Coverage.

6

ARTICLE IV
CHANGE IN CONTROL BENEFITS

4.1Change in Control Benefits

A Participant shall be entitled to receive the following Change in Control Benefits:

4.1.1In the event a Participant is continuously employed as an Employee until a Change in Control:

(a)All outstanding equity-based awards granted to the Participant under any applicable equity compensation plans of the Company as in effect immediately prior to the Change in Control (including but not limited to grants of nonqualified stock options and restricted stock unit awards) that become exercisable, vested or payable based on continued service shall immediately become fully vested and exercisable or payable if within two (2) years following a Change in Control a Participant’s employment is terminated by the Company without Cause or by the Participant for Good Reason, and any amounts so payable shall be paid within thirty (30) days following such termination of employment, provided that if an award provides deferred compensation subject to Section 409A, such award will be paid at the same time and in the same form as it would have been paid had such termination of employment not occurred.  Notwithstanding the foregoing, any such awards that are not continued, assumed, substituted for or replaced by the Company upon the Change in Control shall immediately become fully vested and exercisable or payable as of the date of the Change in Control, and any amounts so payable shall be paid within thirty (30) days following the Change in Control, provided that if an award provides deferred compensation subject to Section 409A, such award will be paid at the same time and in the same form as it would have been paid had no Change in Control occurred.

(b)All outstanding equity-based awards granted to the Participant under any applicable equity compensation plans of the Company as in effect immediately prior to the Change in Control that are eligible to become vested or payable (or that provide for accelerated vesting or payment) upon the attainment of specified performance goals shall be converted, without pro-ration, into that number of restricted stock units equal to the number of shares that would have been  payable had the performance goals been attained at the target performance level, such restricted stock units to become vested and payable upon completion of the applicable performance period and any further service-based vesting period relating to such award, subject to the Participant’s continued employment, provided that such restricted stock units shall immediately become fully vested or payable if within two (2) years following a Change in Control the Participant’s employment is terminated by the Company without Cause or by the Participant for Good Reason, and any amounts so payable shall be paid within thirty (30) days following such termination of employment, provided that if an award provides deferred compensation subject to Section 409A, such award will be paid at the same time and in the same form as it would have been paid had such termination of employment not occurred. Notwithstanding the foregoing, any such restricted stock units that are not continued, assumed, substituted for or replaced by the Company upon the Change in Control shall immediately become fully vested and exercisable or payable as of the date of the Change in Control, and any

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amounts so payable shall be paid within thirty (30) days following the Change in Control; provided that if an award provides deferred compensation subject to Section 409A, such award will be paid at the same time and in the same form as it would have been paid had no Change in Control occurred.

4.1.2If within two (2) years following a Change in Control a Participant’s employment is terminated by the Company without Cause or by the Participant for Good Reason, then, subject to Sections 3.1, 3.3, 4.3 and 4.4, the Participant will be paid an amount in cash equal to the product obtained by multiplying the Participant’s Severance Payment Percentage times the sum of (a) the Participant’s Base Salary plus (b) the Participant’s Annual Bonus.

4.1.3If within two (2) years following a Change in Control a Participant’s employment is terminated by the Company without Cause or by the Participant for Good Reason, then, subject to Sections 3.1, 3.3, 4.1.4, 4.3 and 4.4, and to the extent the Participant and the Participant’s spouse and dependent children properly (and timely) elect COBRA continuation coverage under the Company’s group health plans, the Company shall reimburse the Participant for the proportionate cost of the premiums due for such coverage, as determined by the cost ratio policy for the Company’s Employees in effect from time to time, for a period beginning on the Participant’s termination date and ending on the earliest to occur of (a) the date on which the Participant is no longer entitled to COBRA continuation coverage under the Company’s group health plans, and (b) the expiration of eighteen (18) months from the Participant’s termination date; provided, however, that notwithstanding the foregoing or any other provision in the Plan to the contrary (including, without limitation, Section 6.2), the Company may unilaterally amend this Section 4.1.3 or eliminate the benefit provided hereunder to the minimum extent it reasonably deems necessary to avoid the imposition of excise taxes, penalties or similar charges on the Company or any of its Subsidiaries or Affiliates, including, without limitation, under Code Section 4980D.

4.1.4If within two (2) years following a Change in Control the employment of a Participant who is the Chief Executive Officer of the Company (regardless of age) or an “officer” (within the meaning of Section 16 of the Exchange Act) of the Company who is age fifty-five (55) or older is terminated by the Company without Cause or by the Participant for Good Reason, then, subject to Sections 3.1, 3.3, 4.3 and 4.4, the provisions set forth in this Section 4.1.4, and not those set forth in Section 4.1.3, will apply.

(a)Subject to Sections 4.1.4(b) and (d), the Participant and the Participant’s spouse and eligible dependents will be permitted to continue to participate in the Company’s group health plans until such time as the Participant first becomes eligible to enroll in Medicare Part A or until the Participant becomes eligible for coverage under a subsequent employer’s group health plan, whichever occurs first.  To continue such participation the Participant (or the Participant’s spouse or eligible dependent) must submit to the Company an amount equal to the then applicable COBRA premium for such coverage on or before the first day of the month for which such coverage is being sought; provided, however, that a grace period equal to the grace

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period provided under COBRA within which to make such payment shall be provided to the Participant (and the Participant’s spouse and eligible dependents).

(b)Subject to Section 4.1.4(d), if, and to the extent, the Company determines that continued coverage for the Participant (or the Participant’s spouse or eligible dependents) under the Company’s group health plans is impermissible, unfeasible or undesirable, the Company will reimburse the Participant (and the Participant’s spouse and eligible dependents) for the cost of any individual medical, dental and/or vision insurance policies purchased by the Participant (or the Participant’s spouse or eligible dependent) to replace such coverage until such time as the Participant attains age sixty-five (65) or first becomes eligible to enroll in Medicare Part A or until the Participant becomes eligible for coverage under a subsequent employer’s group health plan, whichever occurs first; provided, however, that in no event shall the total of such reimbursement for any one calendar year exceed Fifty Thousand Dollars ($50,000).  In order to be eligible for such reimbursement, the Participant (or the Participant’s spouse or eligible dependent) must submit proof reasonably satisfactory to the Company that the Participant (or the Participant’s spouse or eligible dependent) paid the premium(s) for such insurance policy(ies), which proof must be submitted to the Company no later than January 31 of the year following the year in which such premium(s) were paid.

(c)The period during which the Participant (or the Participant’s spouse or eligible dependent) is entitled to benefits under this Section 4.1.4 shall run concurrently with any period during which the Participant (or the Participant’s spouse or eligible dependent) is entitled to COBRA continuation coverage under the Company’s group health plans.

(d)Notwithstanding the foregoing or any other provision in the Plan to the contrary (including, without limitation, Section 6.2), this Section 4.1.4 may be amended unilaterally by the Company without the Participants’ consent to the extent necessary to avoid the imposition of excise taxes, penalties or similar charges on the Company or any of its Subsidiaries or Affiliates, including, without limitation, under Code Section 4980D; provided, however, that such amendment shall, to the maximum extent possible, preserve the economic benefit to the Participant provided under this Section 4.1.4 without subjecting the Participant to any additional tax or interest under Section 409A(a)(1)(B) of the Code, including but not limited to a lump sum payment of up to Two Hundred Fifty Thousand Dollars ($250,000) (if such payment would not subject the Participant to any additional tax or interest under Section 409A(a)(1)(B) of the Code).

4.2Method of Payment

4.2.1Any cash payment to which a Participant becomes entitled pursuant to Section 4.1.2 shall be paid to the Participant in a lump sum within ten (10) days after the Participant’s Release becomes effective or, if later, on the date of the Change in Control; provided, however, that if the maximum period during which the Participant can consider and revoke the Release begins in one calendar year and ends in the subsequent calendar year, then such lump sum payment shall be made in the subsequent calendar year, but in any event, no later than March 15 of such calendar year.

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4.2.2Any reimbursements to which a Participant becomes entitled pursuant to Section 4.1.3 or 4.1.4 shall be paid to the Participant no later than the last day of the calendar month immediately following the calendar month in which the premiums to which such reimbursements relate are paid to the Company or the Company’s COBRA administrator, as applicable (or, with respect to reimbursements pursuant to Section 4.1.4(b), in which satisfactory proof of payment is received by the Company); provided, however, that the first such reimbursement shall be made within ten (10) days after the Release becomes effective or, if later, on the date of the Change in Control, and shall include all such reimbursements as may relate to periods prior to such date; and provided, further, that if the maximum period during which the Participant can consider and revoke the Release begins in one calendar year and ends in the subsequent calendar year, then the first such reimbursement shall be made in the subsequent calendar year, but in any event, no later than March 15 of such calendar year.

4.2.3If a Participant dies after becoming eligible for a cash Severance Payment and executing the Release but before payment of the cash Severance Payment, the cash Severance Payment will be paid to the Participant’s estate in a lump sum, provided that the executive or representative of the Participant’s estate (or any other authorized person) does not revoke the Release prior to the end of the revocation period.  If a Participant dies after becoming eligible for a cash Severance Payment but before executing the Release, no Severance Payment or Company-Paid Coverage with respect to the Participant will be payable under the Plan, unless the executor or representative of the Participant’s estate executes a Release, which Release becomes effective (i.e., the executor or representative has signed the Release and any revocation period has expired without the executor’s or representative’s revoking the Release) no later than March 8 of the calendar year immediately following the calendar year in which the Participant’s employment terminates.  Notwithstanding Section 3.3 or 4.2.1 or any other provision in the Plan to the contrary, solely for purposes of the immediately preceding sentence, the period during which the executor or representative may consider the Release shall end on March 1 of the calendar year immediately following the calendar year in which the Participant’s employment terminates and payment shall be made in such subsequent calendar year (and on or before March 15 thereof).

4.2.4All payments and reimbursements under this Plan will be net of amounts withheld with respect to taxes, offsets or other obligations.

4.3Limitation on Payments Under Certain Circumstances

(a)Notwithstanding any other provision of the Plan, in the event that the Participant becomes entitled to receive or receives any payments, options, awards or benefits (including, without limitation, the monetary value of any non-cash benefits and the accelerated vesting of stock awards) under the Plan or under any other plan, agreement or arrangement with the Company, any person whose actions result in a Change in Control or any person affiliated with the Company or such person (collectively, the “Payments”), that may separately or in the aggregate constitute “parachute payments” within the meaning of Code Section 280G and the Treasury regulations promulgated thereunder (“Section 280G”) and it is determined that, but for this Section 4.3(a), any of the Payments will be subject to any excise tax pursuant to Code

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Section 4999 or any similar or successor provision (the “Excise Tax”), the Company shall pay to the Participant either (i) the full amount of the Payments or (ii) an amount equal to the Payments reduced by the minimum amount necessary to prevent any portion of the Payments from being an “excess parachute payment” (within the meaning of Section 280G) (the “Capped Payments”), whichever of the foregoing amounts results in the receipt by the Participant, on an after-tax basis (with consideration of all taxes incurred in connection with the Payments, including the Excise Tax), of the greatest amount of Payments notwithstanding that all or some portion of the Payments may be subject to the Excise Tax.  For purposes of determining whether the Participant would receive a greater after-tax benefit from the Capped Payments than from receipt of the full amount of the Payments and for purposes of Section 4.3(c) (if applicable), the Participant shall be deemed to pay federal, state and local taxes at the highest marginal rate of taxation for the applicable calendar year.

(b)All computations and determinations called for by Sections 4.3(a) and 4.3(c) shall be made and reported in writing to the Company and the Participant by a third-party service provider selected by the Company (the “Tax Advisor”), and all such computations and determinations shall be conclusive and binding on the Company and the Participant.  For purposes of such calculations and determinations, the Tax Advisor may rely on reasonable, good faith interpretations concerning the application of Code Sections 280G and 4999.  The Company and the Participant shall furnish to the Tax Advisor such information and documents as the Tax Advisor may reasonably request in order to make the required calculations and determinations.  The Company shall bear all fees and expenses charged by the Tax Advisor in connection with its services.

(c)In the event that Section 4.3(a) applies and a reduction is required to be applied to the Payments thereunder, the Payments shall be reduced by the Company in a manner and order of priority that provides the Participant with the largest net after-tax value; provided that payments of equal after-tax present value shall be reduced in the reverse order of payment.  Notwithstanding anything to the contrary herein, any such reduction shall be structured in a manner intended to comply with Section 409A.

4.4Forfeiture of Change in Control Benefits

Notwithstanding any other provision of the Plan to the contrary, if it is determined by the Company that a Participant has violated the Company’s code of conduct or code of ethics or violated any restrictive covenants contained in the Participant’s general waiver and release or any other restrictive covenants contained in any other Company plan or program or agreement between the Company and the Participant, the Participant shall be required to repay to the Company an amount equal to the economic value of all amounts already paid or provided to the Participant under the Plan and the Participant shall forfeit all other entitlements under the Plan.  Additional forfeiture provisions may apply under the Plan or other agreements between the Participant and the Company, and any such forfeiture provisions shall remain in full force and effect.

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4.5Voluntary Resignation; Termination for Cause

If (a) the Participant’s employment terminates by reason of the Participant’s voluntary resignation other than for Good Reason, (b) the Company terminates the Participant for Cause, or (c) a Participant’s employment terminates for any reason prior to the occurrence of a Change in Control (other than under circumstances that entitle the Participant to Change in Control Benefits), then the Participant shall not be entitled to receive Change in Control Benefits under the Plan and shall be entitled only to those benefits (if any) as may be available under the Company’s then existing benefit plans and policies at the time of such termination.

4.6Disability; Death

If the Participant’s employment terminates by reason of the Participant’s death, or in the event the Company terminates the Participant’s employment following his or her Disability, the Participant shall not be entitled to receive severance or other benefits under the Plan and shall be entitled only to those benefits (if any) as may be available under the Company’s then existing benefit plans and policies at the time of such termination.

ARTICLE V
SUCCESSOR TO COMPANY

The Plan shall inure to the benefit of and be binding upon the Company and its successors.  The Company shall require any corporation, entity, individual or other person who is the successor (whether direct or indirect by purchase, merger, consolidation, reorganization or otherwise) to all or substantially all the business and/or assets of the Company to expressly assume and agree to perform, by a written agreement in form and in substance satisfactory to the Company, all of the obligations of the Company under the Plan.  As used in the Plan, the term “Company” shall mean the Company as hereinbefore defined and any successor to its business and/or assets as aforesaid that assumes and agrees to perform the Plan by operation of law, written agreement or otherwise.

ARTICLE VI
DURATION, AMENDMENT AND TERMINATION

6.1Duration

The Plan shall terminate five (5) years from the Effective Date, unless (a) the Plan is extended by the Board, (b) a Change in Control occurs while the Plan is in effect, or (c) the Board terminates the Plan in accordance with Section 6.2.  If a Change in Control occurs while the Plan is in effect, the Plan shall continue in full force and effect for at least two (2) years following such Change in Control, and shall not terminate or expire until after all Participants who become entitled to any payments or benefits hereunder shall have received such payments and benefits in full.

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6.2Amendment or Termination

The Board shall have the discretionary authority to amend the Plan in any respect, including as to the removal or addition of Participants, and to suspend or terminate the Plan at any time by action of a majority of the Board, unless a Change in Control has occurred.  If a Change in Control has occurred, the Plan and the designation of Participants shall no longer be subject to amendment, suspension or termination in any respect without the prior written consent of each Participant to whom such action applies.

6.3Procedure for Extension, Amendment or Termination

Any extension, amendment or termination of the Plan by the Board in accordance with this Article VI shall be made by action of the Board in accordance with the Company’s charter and by-laws and applicable law.

ARTICLE VII
MISCELLANEOUS

7.1Default in Payment

Any payment not made within ten (10) days after it is due in accordance with the Plan shall thereafter bear interest, compounded annually, at the prime rate from time to time in effect at JPMorgan Chase & Co. or any successor thereto.

7.2No Assignment

No interest of any Participant or spouse of any Participant or any other beneficiary under the Plan, or any right to receive payment hereunder, shall be subject in any manner to sale, transfer, assignment, pledge, attachment, garnishment, or other alienation or encumbrance of any kind, nor may such interest or right to receive a payment or distribution be taken, voluntarily or involuntarily, for the satisfaction of the obligations or debts of, or other claims against, a Participant or spouse of a Participant or other beneficiary, including for alimony.

7.3Claims Process

7.3.1Claim for Benefits.  A Participant (or any individual authorized by such Participant) has the right under ERISA and the Plan to file a written claim for benefits.  To file a claim, the Participant must send the written claim to the Company’s Vice President of Human Resources, who shall consider the claim.  If such claim is denied in whole or in part, the Participant shall receive written notice of the decision of the Company’s Vice President of Human Resources, within ninety (90) days after the claim is received.  Such written notice shall include the following information:  (a) specific reasons for the denial; (b) specific reference to pertinent Plan provisions on which the denial is based; (c) a description of any additional material or information necessary for the perfection of the claim and an explanation of why it is needed; and (d) steps to be taken if the Participant wishes to appeal the denial of the claim, including a statement of the Participant’s right to bring a civil action under Section 502(a) of

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ERISA upon an adverse decision on appeal.  If the Company’s Vice President of Human Resources needs more than ninety (90) days to make a decision, he or she shall notify the Participant in writing within the initial ninety (90) days and explain why more time is required, and how long is needed.  The Company’s Vice President of Human Resources may then take ninety (90) more days to make a decision.

7.3.2Appeals.  The following appeal procedures give the rules for appealing a denied claim.  If a claim for benefits is denied, in whole or in part, or if the Participant believes benefits under the Plan have not been properly provided, the Participant (or any individual authorized by such Participant) may appeal this denial in writing within sixty (60) days after the denial is received by filing a written request for review with the Compensation Committee.  The Compensation Committee shall conduct a review and make a final decision within sixty (60) days after receiving the Participant’s written request for review.  If the Compensation Committee needs more than sixty (60) days to make a decision, it shall notify the Participant in writing within the initial sixty (60) days and explain why more time is required and the date by which the Compensation Committee expects to render its decision.  The Compensation Committee may then take sixty (60) more days to make a decision.  If such appeal is denied in whole or in part, the decision shall be in writing and shall include the following information:  (a) specific reasons for the denial; (b) specific reference to pertinent Plan provisions on which the denial is based; (c) a statement of the Participant’s right to access and receive copies, upon request and free of charge, of all documents and other information relevant to such claim for benefits; and (d) a statement of the Participant’s (or representative’s) right to bring a civil action under Section 502(a) of ERISA.  If a Participant’s claim is denied, in whole or in part, the Participant (or any individual authorized by such Participant) will be provided, upon request and free of charge, reasonable access to, and copies of, all documents, records and other information relevant (within the meaning of 29 C.F.R. § 2560.503-1(m)(8)) to his or her claim.  Likewise, a Participant (or any individual authorized by such Participant) who submits a written request to appeal a denied claim shall have the right to submit any comments, documents, records or other information relating to the claim that he or she wishes to provide.

7.3.3Limitations Period.  A Participant must pursue the claim and appeal rights described above before seeking any other legal recourse regarding a claim for benefits.  If a Participant fails to complete and exhaust such claims and appeal procedures, the Participant shall forfeit his or her right to sue in a court of law.  A Participant may not initiate legal proceedings in a court of law more than one year after the date on which the Participant receives the Compensation Committee’s written denial of his or her claim on appeal.  Any further review, judicial or otherwise of the Compensation Committee’s decision on the Participant’s claim will be limited to whether, in the particular instance, the Compensation Committee abused its discretion.  In no event will such further review, judicial or otherwise, be on a de novo basis, because the Compensation Committee has the discretionary authority to determine eligibility for (and the amount of) benefits and to construe and interpret the terms and provisions of the Plan.

7.4Effect on Other Plans, Agreements and Benefits

Except to the extent expressly set forth herein, any benefit or compensation to which a

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Participant is entitled under any agreement between the Participant and the Company or any of its Subsidiaries or under any plan maintained by the Company or any of its Subsidiaries in which the Participant participates or participated shall not be modified or lessened in any way, but shall be payable according to the terms of the applicable plan or agreement.  Notwithstanding the foregoing, any benefits received by a Participant pursuant to the Plan shall be in lieu of any severance benefits to which the Participant would otherwise be entitled under any general severance policy or other severance plan maintained by the Company for its management personnel and, upon consummation of a Change in Control, Participants in the Plan shall in no event be entitled to participate in any such severance policy or other severance plan maintained by the Company for its management personnel.

7.5Notice

For the purpose of the Plan, notices and all other communications provided for in the Plan shall be in writing and shall be deemed to have been duly given when actually delivered or mailed by United States registered mail, return receipt requested, postage prepaid, addressed to the Company’s General Counsel at the Company’s corporate headquarters address, and to the Participant (at the last address of the Participant on the Company’s books and records), provided, that all notices to the Company shall be directed to the attention of the Board with a copy to the Secretary.

7.6Employment Status

The Plan does not constitute a contract of employment or impose on the Participant or the Company any obligation for the Participant to remain an Employee or change the status of the Participant’s employment or the policies of the Company or its Subsidiaries or Affiliates regarding termination of employment.

7.7Plan Administration

The Plan shall be administered by the Compensation Committee.  The Compensation Committee has all power and authority necessary or convenient to administer the Plan, including, but not limited to, the exclusive authority and discretion to:  (a) construe and interpret the Plan; (b) decide all questions of eligibility for and the amount of benefits under the Plan; (c) prescribe procedures to be followed and the forms to be used by the Participants pursuant to the Plan; and (d) request and receive from all Participants such information as the Compensation Committee determines is necessary for the proper administration of the Plan.

7.8Unfunded Plan Status

The Plan is intended to be an unfunded plan maintained primarily for the purpose of providing deferred compensation for a select group of management or highly compensated employees, within the meaning of Section 401 of ERISA.  All payments pursuant to the Plan shall be made from the general funds of the Company and no special or separate fund shall be established or other segregation of assets made to ensure payment.  No Participant or other person shall have under any circumstances any interest in any particular property or assets of the

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Company as a result of participating in the Plan.  Notwithstanding the foregoing, the Company may (but shall not be obligated to) create one or more grantor trusts, the assets of which are subject to the claims of the Company’s creditors, to assist it in accumulating funds to pay its obligations under the Plan.

7.9Validity and Severability

The invalidity or unenforceability of any provision of the Plan shall not affect the validity or enforceability of any other provision of the Plan, which shall remain in full force and effect, and any prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

7.10Section 409A

(a)General.  The Plan is intended to comply with the requirements of Section 409A or an exemption or exclusion therefrom and, with respect to amounts that are subject to Section 409A, shall in all respects be administered in accordance with Section 409A.  Any payments that qualify for the “short-term deferral” exception or another exception under Section 409A shall be paid under the applicable exception.  Each payment of compensation under the Plan shall be treated as a separate and distinct payment of compensation for purposes of Section 409A and the right to a series of installment payments under the Plan shall be treated as a right to a series of separated and distinct payments.  All payments to be made upon a termination of employment under the Plan may only be made upon a “separation from service” under Section 409A.  In no event may the Participant, directly or indirectly, designate the calendar year of any payment under the Plan.

(b)Delay of Payments.  Notwithstanding any other provision of the Plan to the contrary, if the Participant is considered a “specified employee” for purposes of Section 409A (as determined in accordance with the methodology established by the Company as in effect on the Participant’s date of termination), any payment that constitutes nonqualified deferred compensation within the meaning of Section 409A that is otherwise due to the Participant under the Plan during the six (6) month period following the Participant’s separation from service (as determined in accordance with Section 409A) on account of the Participant’s separation from service shall be accumulated and paid to the Participant on the first business day after the date that is six (6) months following the Participant’s separation from service (the “Delayed Payment Date”).  The Participant shall not be entitled to interest or any other earnings on any cash payments so delayed from the scheduled date of payment to the Delayed Payment Date.  If the Participant dies during the postponement period, the amounts and entitlements delayed on account of Section 409A shall be paid to the personal representative of the Participant’s estate on the first to occur of the Delayed Payment Date or thirty (30) days after the date of the Participant’s death.

(c)Expense Reimbursements and In-Kind Benefits.  With regard to Sections 4.1.3 and 4.1.4 and any other provision of the Plan that provides for reimbursement of expenses or in-kind benefits, except for any expense, reimbursement or in-kind benefit provided pursuant to the

16

Plan that does not constitute a “deferral of compensation,” within the meaning of Treasury Regulation Section 1.409A-1(b), (i) the amount of expenses eligible for reimbursement, or in-kind benefits provided, during any calendar year shall not affect the expenses eligible for reimbursement, or in-kind benefits to be provided, in any other calendar year, (ii) such payments shall be made on or before the last day of the calendar year following the calendar year in which the expense was incurred, and (iii) the right to reimbursement or in-kind benefits shall not be subject to liquidation or exchange for another benefit.

7.11Recoupment

Notwithstanding any other provisions in the Plan to the contrary, by executing a Participation Agreement a Participant acknowledges and agrees that he or she will be subject to recoupment policies adopted by the Company pursuant to the requirements of the Dodd-Frank Wall Street Reform and Consumer Protection Act or other law or the listing requirements of any national securities exchange on which the common stock of the Company is listed, to the extent such policies apply to payments and benefits payable or paid under the Plan.

7.12Governing Law

The validity, interpretation, construction and performance of the Plan shall in all respects be governed by the laws of the State of Colorado, without reference to principles of conflict of laws, except to the extent pre-empted by Federal law.

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ANNEX A

CROCS, INC.
CHANGE IN CONTROL PLAN
PARTICIPATION AGREEMENT

To:[Name of Participant]
Date:[                    ], 20[    ]

The Board has designated you as a Participant in the Crocs, Inc. Change in Control Plan, a copy of which is attached to this Participation Agreement (this “Agreement”).  The terms and conditions of your participation in the Plan are as set forth in the Plan and in this Agreement.  The terms defined in the Plan shall have the same defined meanings in this Agreement.  Pursuant to Section 1.4 of the Plan, the intent of the parties is to create a contractual relationship in respect of the benefits and terms of the Plan.  As a condition to receiving certain benefits under the Plan, you must sign a Release in the form provided by the Company.  The variables relating to your Plan participation are as follows:

Severance Payment Percentage: [percentage from [x]% to 300% determined by the Committee]

The Change in Control Benefits are subject to forfeiture or repayment as described in the Plan if you have violated the Company’s code of conduct or code of ethics or violated any restrictive covenants contained in your Release or any other restrictive covenants contained in any other Company plan or program or agreement between you and the Company.

If you agree to participate in the Plan on these terms and conditions, please acknowledge your acceptance by signing below.  By signing below, you acknowledge and agree that the Plan shall completely supersede and replace any and all portions of any contracts, plans, provisions or practices pertaining to severance entitlements owing to you from the Company, and is in lieu of any notice requirement, policy or practice.  As such, the Change in Control Benefits described herein shall serve as your sole recourse with respect to payments and benefits provided by the Company upon, in connection with or following a Change in Control.

[For employees with employment agreements in place of above paragraph:  If you agree to participate in the Plan on these terms and conditions, please acknowledge your acceptance by signing below.  Those provisions relating to your potential rights to severance pay, equity acceleration, benefits and notice specifically arising from or in respect of a Change in Control under the Employment Agreement dated [                    ] between you and the Company shall be deemed completely replaced and superseded by the analogous provisions of the Plan; provided that except as specifically modified (mutatis mutandis) by the foregoing provision, said employment agreement remains enforceable and in full force and effect.  As such, the Change in Control Benefits described herein shall serve as your sole recourse with respect to such payments and benefits provided by the Company upon, in connection with or following a Change in

A-1

Control.]

Please return the signed copy of this Notice of Participation to:

[Officer]

Crocs, Inc.

[                              ]

[                              ]

Your failure to timely remit this signed Agreement will result in your immediate removal from the Plan.  Please retain a copy of this Agreement, along with the Plan, for your records.

Date:
	(Signature)

A-2

EX-10.2

Exhibit 10.2

EXECUTION VERSION

FOURTH AMENDMENT TO AMENDED AND RESTATED
CREDIT AGREEMENT

This Fourth Amendment to Amended and Restated Credit Agreement (the “Amendment”), is made this 27th day of March, 2014 among CROCS, INC., a corporation organized under the laws of the State of Delaware (“Crocs”), CROCS RETAIL, INC., a corporation organized under the laws of the State of Colorado (“Retail”), OCEAN MINDED, INC., a corporation organized under the laws of the State of Colorado (“Ocean”), JIBBITZ, LLC, a limited liability company organized under the laws of the State of Colorado (“Jibbitz”), BITE, INC., a corporation organized under the laws of the State of Colorado (“Bite”, together with Crocs, Retail, Ocean, Jibbitz and each other Person joined as a borrower from time to time to the Credit Agreement (as defined below), collectively “Borrowers” and each a “Borrower”), the financial institutions which are now party to the Credit Agreement as lenders and who execute this Amendment  (collectively, the “Consenting Lenders” and each individually a “Consenting Lender”) and PNC BANK, NATIONAL ASSOCIATION (“PNC”), as agent for Lenders (PNC, in such capacity, the “Administrative Agent”).

BACKGROUND

A.On December 16, 2011, Borrowers, Lenders and Administrative Agent entered into, inter alia, that certain Amended and Restated Credit Agreement (as same has been or may hereafter be amended, modified, renewed, extended, restated or supplemented from time to time, including without limitation as amended by that certain First Amendment to Amended and Restated Credit Agreement by and among the parties hereto dated as of December 10, 2012, that certain Second Amendment to Amended and Restated Credit Agreement by and among the parties hereto dated as of June 12, 2013, and that certain Third Amendment to Amended and Restated Credit Agreement by and among the parties hereto dated as of December 27, 2013, the “Credit Agreement”) to reflect certain financing arrangements among the parties thereto.  The Credit Agreement and all other documents executed in connection therewith to the date hereof are collectively referred to as the “Existing Financing Agreements”.  All capitalized terms used and not otherwise defined herein shall have the meaning ascribed thereto in the Credit Agreement, as amended hereby.

B.Borrowers have requested and Administrative Agent and Consenting Lenders have agreed to modify certain terms and provisions of the Credit Agreement on the terms and subject to the conditions contained in this Amendment.  For the avoidance of doubt, the Consenting Lenders are sufficient to constitute Required Lenders.

NOW, THEREFORE, in consideration of the mutual promises contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:

Section 1.Amendments to Credit Agreement.

(a)Definitions. Upon the Effective Date, the following definitions in Section 1.1 of the Credit Agreement shall be amended and restated in their entirety as follows:

Consolidated EBITDAR shall mean for any period the sum of (i) net income (or loss) of Borrowers on a Consolidated Basis for such period (excluding, in each case to the extent incurred or charged during the applicable period: (w) one-time non-cash charges with the consent of Administrative Agent in the aggregate not to exceed $25,000,000 for such period and non-cash share based compensation expenses, (x) any transaction costs associated with the Preferred Stock Issuance in an amount not to exceed $30,000,000 in the aggregate to the extent paid within 180 days of the closing of the Preferred Stock Issuance, and (y) cash and non-cash charges incurred during fiscal years 2013 and 2014 in connection with store closings or restructuring, charges for inventory obsolescence, other corporate restructuring activities or contingent liabilities, in an amount not to exceed $25,000,000 in the aggregate or $10,000,000 with respect to cash charges), plus (ii) all interest expense of Borrowers on a Consolidated Basis for such period, plus (iii) all charges against income of Borrowers on a Consolidated Basis for such period for federal, state and local taxes, plus (iv) depreciation expenses for such period, plus (v) amortization expenses for such period, plus (vi) Borrowers’ aggregate Rental Expenses for such period.

Fixed Charges  shall mean for any period of determination the sum of cash interest expense, cash income taxes, scheduled principal installments on Indebtedness (as adjusted for prepayments), Unfunded Capital Expenditures and payments under Capitalized Leases, Rental Expenses and cash dividends and distributions (including tax distributions) when actually paid, in each case, of the Borrowers on a Consolidated Basis; provided however that to the extent paid in the applicable testing period, Fixed Charges shall not include any payments made in connection with a tax settlement with the Canadian tax authorities in an amount not to exceed $10,000,000 in the aggregate.

(b)Definitions. Upon the Effective Date, the following definition shall be added to  Section 1.1 of the Credit Agreement in the appropriate alphabetical sequence:

Unfunded Capital Expenditures  shall mean, as to any Borrower, without duplication, a Capital Expenditure funded (a) from such Borrower’s internally generated cash flow or (b) with the proceeds of a Revolving Credit Loan or a Swing Loan.

(c)Section 8.2.14Minimum Fixed Charge Coverage Ratio.Upon the Effective Date, Section 8.2.14 of the Credit Agreement shall be amended and restated in its entirety as follows:

8.2.14Minimum Fixed Charge Coverage Ratio.  The Loan Parties shall not permit the Fixed Charge Coverage Ratio to be less than the following ratios for the following time periods, in each case calculated as of the end of each fiscal quarter for the four (4) fiscal quarters then ended:

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Period	Minimum Fixed Charge Coverage Ratio
Fiscal Quarter Ending March 31, 2014	1.15 to 1.00
Fiscal Quarter Ending June 30, 2014	1.15 to 1.00
Fiscal Quarter Ending September 30, 2014	1.20 to 1.00
Fiscal Quarter Ending December 31, 2014	1.20 to 1.00
Fiscal Quarter Ending March 31, 2015 and each Fiscal Quarter Thereafter	1.25 to 1.00

Notwithstanding anything to the contrary, for purposes of calculating the Fixed Charge Coverage Ratio for any applicable testing period, any costs incurred in fiscal year 2014 by the Loan Parties in connection with the implementation of a SAP software system,  in an aggregate amount not to exceed $30,000,000, shall not be deemed to be Unfunded Capital Expenditures or included in Fixed Charges.

Section 2.Acknowledgment of Guarantors.  By execution of this Amendment, each Guarantor hereby covenants and agrees that each of the Amended and Restated  Guaranty and Suretyship Agreements dated December 16, 2011 shall remain in full force and effect and shall continue to cover the existing and future Obligations of Borrowers to Administrative Agent and Lenders under the Credit Agreement.

Section 3.Conditions Precedent.  This Amendment shall be effective upon (the “Effective Date”):

(a)Administrative Agent’s receipt of this Amendment fully executed by the Borrowers, the Guarantors, Administrative Agent and Consenting Lenders;

(b)Administrative Agent shall have received a non refundable amendment fee in the amount of $30,000, which fee shall be fully earned upon execution hereof and payable pro rata to all Consenting Lenders who consent to this Amendment in accordance with such Consenting Lender’s Commitment percentage; and

(c)Receipt by Administrative Agent of resolutions (authorizing their respective guarantees) and incumbency certificates for Western Brands Holding Company, LLC and RA Footwear, LLC.

Section 4.Representations and Warranties.  Each Borrower:

(a)reaffirms all representations and warranties made to Administrative Agent and Lenders under the Credit Agreement and all of the other Existing Financing Agreements and confirms that all are true and correct in all material respects as of the date hereof (except to the extent any such representations and warranties specifically relate to a specific date, in which case such representations and warranties were true and correct in all material respects on and as of such other specific date);

3

(b)reaffirms all of the covenants contained in the Credit Agreement, covenants to abide thereby until satisfaction in full of the Obligations and termination of the Credit Agreement;

(c)represents and warrants to the Administrative Agent and the Lenders that no Potential Default or Event of Default has occurred and is continuing under any of the Existing Financing Agreements;

(d)represents and warrants to the Administrative Agent and the Lenders that it has the authority and legal right to execute, deliver and carry out the terms of this Amendment, that such actions were duly authorized by all necessary limited liability company or corporate action, as applicable, and that the officers executing this Amendment on its behalf were similarly authorized and empowered, and that this Amendment does not contravene any provisions of its certificate of incorporation or formation, operating agreement, bylaws, or other formation documents, as applicable, or of any contract or agreement to which it is a party or by which any of its properties are bound; and

(e)represents and warrants to the Administrative Agent and the Lenders that this Amendment and all assignments, instruments, documents, and agreements executed and delivered in connection herewith, are valid, binding and enforceable in accordance with their respective terms, except as such enforceability may be limited by any applicable bankruptcy, insolvency, moratorium or similar laws affecting creditors’ rights generally.

Section 5.General Provisions.

(a)Payment of Expenses.  Borrowers shall pay or reimburse Administrative Agent and Lenders for their reasonable attorneys’ fees and expenses in connection with the preparation, negotiation and execution of this Amendment and the documents provided for herein or related hereto.

(b)Reaffirmation of Credit Agreement.  Except as modified by the terms hereof, all of the terms and conditions of the Credit Agreement, as amended, and all of the other Existing Financing Agreements are hereby reaffirmed and shall continue in full force and effect as therein written.

(c)Third Party Rights.  No rights are intended to be created hereunder for the benefit of any third party donee, creditor, or incidental beneficiary.

(d)Headings.  The headings of any paragraph of this Amendment are for convenience only and shall not be used to interpret any provision hereof.

(e)Modifications.  No modification hereof or any agreement referred to herein shall be binding or enforceable unless in writing and signed on behalf of the party against whom enforcement is sought.

(f)Governing Law.  This Amendment shall be governed by and construed in accordance with the laws of the State of New York applied to contracts to be performed wholly within the State of New York.

4

(g)Counterparts.  This Amendment may be executed in any number of and by different parties hereto on separate counterparts, all of which, when so executed, shall be deemed an original, but all such counterparts shall constitute one and the same agreement.  Any signature delivered by a party by facsimile transmission or PDF shall be deemed to be an original signature hereto.

(Signature Pages Follow)

5

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed by their respective officers thereunto duly authorized as of the day and year first above written.

BORROWERS:
CROCS, INC.
By:	/s/ Jeffrey J. Lasher
Name:	Jeffrey J. Lasher
Title:	Chief Financial Officer
CROCS RETAIL, INC.
By:	/s/ Jeffrey J. Lasher
Name:	Jeffrey J. Lasher
Title:	Chief Financial Officer
OCEAN MINDED, INC.
By:	/s/ Jeffrey J. Lasher
Name:	Jeffrey J. Lasher
Title:	Chief Financial Officer
JIBBITZ, LLC
By:	/s/ Jeffrey J. Lasher
Name:	Jeffrey J. Lasher
Title:	Manager
BITE, INC.
By:	/s/ Jeffrey J. Lasher
Name:	Jeffrey J. Lasher
Title:	Chief Financial Officer

[Signature Page to Fourth Amendment]

S-1

GUARANTORS:
WESTERN BRANDS HOLDING COMPANY, LLC
By:	/s/ Jeffrey J. Lasher
Name:	Jeffrey J. Lasher
Title:	Chief Financial Officer and Manager
RA FOOTWEAR, LLC
By:	/s/ Jeffrey J. Lasher
Name:	Jeffrey J. Lasher
Title:	Authorized Representative
FURY, INC.
By:	/s/ Jeffrey J. Lasher
Name:	Jeffrey J. Lasher
Title:	Chief Financial Officer

[Signature Page to Fourth Amendment]

S-2

ADMINISTRATIVE AGENT AND LENDERS:
PNC BANK, NATIONAL ASSOCIATION, As Lender and as Administrative Agent
By:	/s/ Steve C. Roberts
Name:	Steve C. Roberts
Title:	Vice President
JPMORGAN CHASE BANK, N.A., as Lender
By:	/s/ Monica Popowczak
Name:	Monica Popowczak
Title:	Underwriter
WELLS FARGO BANK, N.A., as Lender
By:
Name:
Title:

[Signature Page to Fourth Amendment]

S-3

EX-31.1

EXHIBIT 31.1

SECTION 302 CERTIFICATION

I, John P. McCarvel, certify that:

1.I have reviewed this quarterly report on Form 10-Q of Crocs, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: April 30, 2014	/s/ John P. McCarvel
	John P. McCarvel
	President and Chief Executive Officer

EX-31.2

EXHIBIT 31.2

SECTION 302 CERTIFICATION

I, Jeffrey J. Lasher, certify that:

1.I have reviewed this quarterly report on Form 10-Q of Crocs, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: April 30, 2014	/s/ Jeffrey J. Lasher
	Jeffrey J. Lasher
	Senior Vice President — Finance, Chief Financial Officer

EX-32

EXHIBIT 32

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO SECTION 906
OF THE SARBANES-OXLEY ACT OF 2002

The undersigned, Chief Executive Officer and Chief Financial Officer of Crocs, Inc. (the “Company”), hereby certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that to the best of their knowledge:

(1)The Quarterly Report on Form 10-Q of the Company for the three months ended March 31, 2014 (the “Form 10-Q”) fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)), and

(2)The information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Company for the period covered by this report.

Date: April 30, 2014	/s/ John P. McCarvel
	John P. McCarvel
	President and Chief Executive Officer
	/s/ Jeffrey J. Lasher
	Jeffrey J. Lasher
	Senior Vice President — Finance, Chief Financial Officer

A signed original of this written statement required by Section 906 has been provided to Crocs, Inc. and will be retained by Crocs, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

XML

Asset Impairments (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Asset Impairment Charges [Abstract]
Asset impairment charges	$ 0	$ 0

XML

Stock Option Activity (Details) (USD $)	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Share-based Arrangements with Employees and Nonemployees [Abstract]
Shares outstanding at beginning of period	2,105,152	2,621,686
Shares granted	24,000	79,500
Shares exercised	(73,557)	(97,309)
Shares forfeited or expired	(35,287)	(63,200)
Shares outstanding at end of period	2,020,308	2,540,677
Weighted average exercise price of options outstanding at beginning of period	$ 13.34	$ 13.03
Weighted average exercise price of options granted	$ 15.33	$ 15.29
Weighted average exercise price of options exercised	$ 7.05	$ 6.20
Weighted average exercise price of options forfeited or expired	$ 18.07	$ 18.48
Weighted average exercise price of options outstanding at end of period	$ 13.51	$ 13.24

XML

Summary of Derivative Financial Instruments Notional Amounts on Outstanding Positions (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2014	Dec. 31, 2013
Foreign currency exchange forward contracts by currency:
Total notional value, net	$ 322,233	$ 220,494
Latest maturity date	May 01, 2014	Dec. 01, 2015
Japanese Yen [Member]
Foreign currency exchange forward contracts by currency:
Total notional value, net	67,413	68,707
Euro [Member]
Foreign currency exchange forward contracts by currency:
Total notional value, net	52,850	38,577
Russian Ruble [Member]
Foreign currency exchange forward contracts by currency:
Total notional value, net	38,754	17,588
British Pound Sterling [Member]
Foreign currency exchange forward contracts by currency:
Total notional value, net	36,702	15,487
South Korean Won [Member]
Foreign currency exchange forward contracts by currency:
Total notional value, net	34,867	12,100
Singapore Dollar [Member]
Foreign currency exchange forward contracts by currency:
Total notional value, net	25,200	28,225
Mexican Peso [Member]
Foreign currency exchange forward contracts by currency:
Total notional value, net	18,125	18,350
Australian Dollar [Member]
Foreign currency exchange forward contracts by currency:
Total notional value, net	12,689	4,941
New Taiwan Dollar [Member]
Foreign currency exchange forward contracts by currency:
Total notional value, net	8,779	3,463
South African Rand [Member]
Foreign currency exchange forward contracts by currency:
Total notional value, net	7,746	3,076
Indian Rupee [Member]
Foreign currency exchange forward contracts by currency:
Total notional value, net	5,525	2,150
Canadian Dollar [Member]
Foreign currency exchange forward contracts by currency:
Total notional value, net	4,972	3,428
Hong Kong Dollar [Member]
Foreign currency exchange forward contracts by currency:
Total notional value, net	3,533	1,844
New Zealand Dollar [Member]
Foreign currency exchange forward contracts by currency:
Total notional value, net	2,468	943
Swedish Krona [Member]
Foreign currency exchange forward contracts by currency:
Total notional value, net	2,222	1,615
Norwegian Krone [Member]
Foreign currency exchange forward contracts by currency:
Total notional value, net	$ 388

XML

Legal Tax Proceedings (Details) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2014 Mexican Federal Tax Authority [Member] USD ($)	Mar. 31, 2014 Mexican Federal Tax Authority [Member] MXN	Mar. 31, 2014 U.S. Customs and Border Protection [Member] USD ($)
Income Tax Examination [Line Items]
Unpaid duties			$ 12.4
Initial assessment for unpaid duties			14.3
Penalties and interest assessed	22.0	280.0
Surety bond	$ 26.0	321.0

XML

Restricted Stock Awards and Restricted Stock Units Description of Performance Incentive Plans (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Schedule of Restricted Stock Award and Restricted Stock Unit Activity [Line Items]
Share-based compensation expense	$ 4.7	$ 3.5
Performance-based Restricted Stock Units [Member]
Schedule of Restricted Stock Award and Restricted Stock Unit Activity [Line Items]
Share grants approved in period	1.0	0.6
Time-based Restricted Stock Units [Member]
Schedule of Restricted Stock Award and Restricted Stock Unit Activity [Line Items]
Share grants approved in period	0.3	0.8
Restricted Stock Units [Member]
Schedule of Restricted Stock Award and Restricted Stock Unit Activity [Line Items]
Share-based compensation expense	$ 3.7	$ 2.7

XML

Summary of Accrued Expenses and Other Current Liabilities Footnote (Details)	Mar. 31, 2014 item	Dec. 31, 2013 item
Accrued Expenses And Other Current Liabilities [Abstract]
Individual Items Accounting For More Than Five Percent Of Balance Of Accrued Expenses	0	0
Percent Of Decision Point On Reporting Individual Items In Accrued Expenses	5.00%	5.00%

XML

Commitments & Contingencies (Tables)

3 Months Ended

Mar. 31, 2014

Commitments And Contingencies [Abstract]

Schedule of rent expense

		Three Months Ended March 31,
		2014		2013
Minimum rentals (1)	$	29,242	$	24,270
Contingent rentals		2,423		2,496
Less: Sublease rentals		(180)		(156)
Total rent expense	$	31,485	$	26,610

(1)Minimum rentals include all lease payments as well as fixed and variable common area maintenance (“CAM”), parking and storage fees, which were approximately $2.4 million during the three months ended March 31, 2014 and 2013.

XML

Schedule Of Restricted Stock Award and Restricted Stock Unit Activity Footnote (Details)	3 Months Ended
	Mar. 31, 2014		Mar. 31, 2013
Restricted Stock Awards [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vested	(15,398)	[1]	(17,206)	[1]
Restricted Stock Units [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vested	(408,564)	[2]	(194,687)	[2]
Time-based Restricted Stock Units [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vested	(377,618)		(142,399)
Performance-based Restricted Stock Units [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vested	(30,946)		(52,288)

[1] The RSAs vested during the three months ended March 31, 2014 and 2013 consisted entirely of time-based awards.

[2] The RSUs vested during the three months ended March 31, 2014 consisted of 30,946 performance-based awards and 377,618 time-based awards. The RSUs vested during the three months ended March 31, 2013 consisted of 52,288 performance-based awards and 142,399 time-based awards.

XML

Legal Proceedings (Details) (USD $) In Millions, unless otherwise specified	Mar. 31, 2014
Legal Proceedings [Abstract]
Legal Settlement Accrual	$ 13.4
Minimum Reasonably Possible Loss	0
Maximum Reasonably Possible Loss	$ 10.3

XML

Property and Equipment (Tables)

3 Months Ended

Mar. 31, 2014

Property And Equipment [Abstract]

Schedule of Property and Equipment

	March 31,		December 31,
($ thousands)	2014		2013
Machinery and equipment	$	52,843	$	52,003
Leasehold improvements		101,761		93,235
Furniture, fixtures and other		25,756		23,653
Construction-in-progress		8,915		16,231
Property and equipment, gross (1)		189,275		185,122
Less: Accumulated depreciation (2)		(102,862)		(98,151)
Property and equipment, net	$	86,413	$	86,971

(1)Includes $0.1 million and $0.1 million of certain equipment held under capital leases and classified as equipment as of March 31, 2014 and December 31, 2013, respectively.

(2)Includes $0.1 million and $0.1 million of accumulated depreciation related to certain equipment held under capital leases as of March 31, 2014 and December 31, 2013,  respectively, which are depreciated using the straight-line method over the lease term.

XML

Revolving Credit Facility (Details) (USD $)	Mar. 31, 2014	Dec. 31, 2013
Line of Credit Facility [Abstract]
Revolving credit facility	$ 0	$ 0
Outstanding letters of credit	$ 7,300,000	$ 7,200,000

XML

Summary of Goodwill & Intangible Assets Footnote (Details) (USD $) In Millions, unless otherwise specified	Mar. 31, 2014	Dec. 31, 2013
Goodwill & Intangible Assets [Abstract]
Gross Capitalized Software Held Under Capital Lease	$ 4.1	$ 4.1
Amortization of Capitalized Software Held Under Capital Lease	$ 2.1	$ 1.9

XML

Summary of Property & Equipment Footnote (Details) (USD $) In Millions, unless otherwise specified	Mar. 31, 2014	Dec. 31, 2013
Property And Equipment [Abstract]
Gross equipment held under capital leases	$ 0.1	$ 0.1
Depreciation for equipment held under capital leases	$ 0.1	$ 0.1

XML

Aggregate Maturities of Long-Term Bank Borrowings (Details) (USD $)	Mar. 31, 2014	Dec. 31, 2013
Debt Disclosure [Abstract]
Remainder of FY 2014	$ 5,169,000
FY 2015	5,305,000
FY 2016	4,150,000
FY 2017	885,000
FY 2018
FY Thereafter
Total principal debt maturities	$ 15,500,000	$ 16,800,000

XML

Operating Segments and Geographic Information Income Statement (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2014		Mar. 31, 2013
Segment Reporting Information [Line Items]
Revenues	$ 312,429		$ 311,656
Income from operations	16,822		37,650
Interest income	(477)		(306)
Interest expense	191		209
Foreign currency transaction losses, net	2,768		2,600
Other income, net	(141)		(28)
Income before income taxes	14,481		35,175
Depreciation and amortization	9,373		10,264
Americas [Member]
Segment Reporting Information [Line Items]
Revenues	117,120		129,429
Income from operations	13,437		20,813
Depreciation and amortization	2,448		2,542
Asia Pacific [Member]
Segment Reporting Information [Line Items]
Revenues	101,865		90,457
Income from operations	27,683		27,103
Depreciation and amortization	1,406		1,278
Japan [Member]
Segment Reporting Information [Line Items]
Revenues	29,050		30,359
Income from operations	6,462		7,560
Depreciation and amortization	334		401
Europe [Member]
Segment Reporting Information [Line Items]
Revenues	64,136		61,346
Income from operations	7,539		12,671
Depreciation and amortization	902		1,150
Total Segment Revenues [Member]
Segment Reporting Information [Line Items]
Revenues	312,171		311,591
Total Segment Operating Income [Member]
Segment Reporting Information [Line Items]
Income from operations	55,121		68,147
Total Segment Depreciation And Amortization [Member]
Segment Reporting Information [Line Items]
Depreciation and amortization	5,090		5,371
Other businesses [Member]
Segment Reporting Information [Line Items]
Revenues	258		65
Income from operations	(3,756)		(3,877)
Depreciation and amortization	1,599		2,117
Intersegment eliminations [Member]
Segment Reporting Information [Line Items]
Income from operations	15		15
Unallocated corporate and other [Member]
Segment Reporting Information [Line Items]
Income from operations	(34,558)	[1]	(26,635)	[1]
Depreciation and amortization	$ 2,684	[1]	$ 2,776	[1]

[1] Includes a corporate component consisting primarily of corporate support and administrative functions, costs associated with share-based compensation, research and development, brand marketing, legal, 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.

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Stock Repurchase Plan Authorizations (Details) (USD $) In Millions, except Per Share data, unless otherwise specified	3 Months Ended
	Mar. 31, 2014
Earnings Per Share [Abstract]
Amount authorized for repurchase under share repurchase authorization	$ 350.0
Number of shares repurchased	0.9
Weighted Average Price Of Shares Repurchased	$ 14.94
Value for shares repurchased	13.0
Amount remaining for repurchase under share repurchase authorization	$ 337.0

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Summary of Fair Value Measurements on a Recurring Basis (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2014	Dec. 31, 2013
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Cash equivalents	$ 118,871	$ 37,870
Derivative Assets
Foreign currency contracts assets		13,501
Derivative Liabilities
Foreign currency contracts liabilities		984
Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Cash equivalents	118,871	37,870
Level 2 [Member]
Derivative Assets
Foreign currency contracts assets		13,501
Derivative Liabilities
Foreign currency contracts liabilities		984
Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Cash equivalents
Derivative Assets
Foreign currency contracts assets
Derivative Liabilities
Foreign currency contracts liabilities

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General

3 Months Ended

Mar. 31, 2014

General [Abstract]

General

1. GENERAL

Organization

Crocs, Inc. and its subsidiaries (collectively the “Company,” “we,” “our” or “us”) are engaged in the design, development, manufacturing, marketing and distribution of footwear, apparel and accessories for men, women and children.

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and with the rules and regulations of the Securities and Exchange Commission (“SEC”) for reporting on Form 10-Q. The condensed consolidated balance sheet as of December 31, 2013 was derived from the Company’s Annual Report on Form 10-K for the year ended December 31, 2013 (the “2013 Form 10-K”). Accordingly, these statements do not include all of the information and disclosures required by GAAP or SEC rules and regulations for complete financial statements. In the opinion of management, these financial statements reflect all adjustments (consisting solely of normal recurring matters) considered necessary for a fair presentation of the results for the interim periods presented. The results of operations for any interim period are not necessarily indicative of results for the full year.

Summary of Significant Accounting Policies

These statements should be read in conjunction with the consolidated financial statements and footnotes included in the 2013 Form 10-K. The accounting policies used in preparing these unaudited condensed consolidated financial statements are the same as those described in Note 1 – Organization & Summary of Significant Accounting Policies to the consolidated financial statements in the 2013 Form 10-K.

Earnings Per Share - Basic and diluted earnings per common share (“EPS”) is presented using the two-class method, which is an earnings allocation formula that determines earnings per share for common stock and any participating securities according to dividend rights and participation rights in undistributed earnings. Under the two-class method, EPS is computed by dividing the sum of distributed and undistributed earnings attributable to common stockholders by the weighted average number of shares of common stock outstanding during the period. A participating security is a security that may participate in undistributed earnings with common stock had those earnings been distributed in any form. Our recently issued Series A Convertible Preferred Stock (“Series A preferred stock”) represent participating securities as holders of the Series A preferred stock are entitled to receive any and all dividends declared or paid on common stock on an as-converted basis. In addition, shares of our non-vested restricted stock awards are considered participating securities as they represent unvested share-based payment awards containing non-forfeitable rights to dividends. As such, these participating securities must be included in the computation of EPS pursuant to the two-class method on a pro-rata, as-converted basis. Diluted EPS reflects the potential dilution from securities that could share in our earnings. In addition, the dilutive effect of each participating security is calculated using the more dilutive of the two-class method described above, which assumes that the securities remain in their current form, or the if-converted method, which assumes conversion to common stock as of the beginning of the reporting date. Anti-dilutive securities are excluded from diluted EPS. See Note 11—Earnings Per Share for further discussion.

Recently Adopted Accounting Standards

In July 2013, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2013-11 Income Taxes (Topic 740): Presentation of an Unrecognized Tax Benefit when a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists (“ASU No. 2013-11”). This pronouncement provides guidance on financial statement presentation of an unrecognized tax benefit (“UTB”) when a net operating loss (“NOL”) carryforward, a similar tax loss or a tax credit carryforward exists. Under the pronouncement, an entity must present a UTB, or a portion of the UTB, in the financial statements as a reduction to a deferred tax asset (“DTA”) for an NOL carryforward, a similar tax loss or a tax credit carryforward except when:

1)An NOL carryforward, a similar tax loss or a tax credit carryforward is not available as of the reporting date under the governing tax law to settle that would result from the disallowance of the tax position.

2)The entity does not intend to use the DTA for this purpose (provided that the tax law permits a choice).

If either of these conditions exists, an entity should present a UTB in the financial statements as a liability and should not net the UTB with a DTA. This amendment does not affect the amounts disclosed in the tabular reconciliation of the total amounts of UTBs because the tabular reconciliation presents gross amounts of UTBs. This pronouncement is effective for fiscal years and interim periods within those fiscal years beginning after December 15, 2013. The Company adopted this pronouncement on January 1, 2014. The adoption of this pronouncement did not have a material impact to the Company's consolidated financial position or results of operations.

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Series A Preferred Stock (Details) (USD $)	3 Months Ended
	Mar. 31, 2014	Dec. 31, 2013
Temporary Equity [Abstract]
Series A preferred shares, issued and outstanding	200,000	200,000
Gross purchase price	$ 198,000,000
Gross purchase price per share	990
Net proceeds from sale of series A preferred stock	182,200,000
Issuance discount	2,000,000
Direct issuance expenses	15,800,000
Stated value of preferred shares per share	1,000
Dividend rate	6
Penalty dividend rate	8
Accrued dividends	2,133,000
Conversion price per share at option of holder	14.50
Conversion price per share at option of company	29.00
Anti-dilutive Series A preferred shares not included in the calculation of EPS	13,793,100
Series A preferred shares, redemption value	$ 202,100,000

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Goodwill & Intangible Assets Amortization Expense (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Goodwill & Intangible Assets [Abstract]
Amortization Expense	$ 4.0	$ 4.2
Amortization Expense Recorded in Cost of Sales	$ 1.3	$ 1.6

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Derivative Financial Instruments (Tables)

3 Months Ended

Mar. 31, 2014

Derivative Financial Instruments [Abstract]

Schedule of Notional Amounts of Outstanding Derivative Positions

	March 31,		December 31,
($ thousands)	2014		2013
Foreign currency exchange forward contracts by currency:
Japanese Yen	$	67,413	$	68,707
Euro		52,850		38,577
Russian Ruble		38,754		17,588
British Pound Sterling		36,702		15,487
South Korean Won		34,867		12,100
Singapore Dollar		25,200		28,225
Mexican Peso		18,125		18,350
Australian Dollar		12,689		4,941
New Taiwan Dollar		8,779		3,463
South African Rand		7,746		3,076
Indian Rupee		5,525		2,150
Canadian Dollar		4,972		3,428
Hong Kong Dollar		3,533		1,844
New Zealand Dollar		2,468		943
Swedish Krona		2,222		1,615
Norwegian Krone		388		-
Total notional value, net	$	322,233	$	220,494
Latest maturity date	May 2014		December 2015

Schedule of Derivative Instrument Gain (Loss)

	Three Months Ended March 31,
($ thousands)	2014		2013		Location of (Gain) Loss Recognized in Income on Derivatives
Foreign currency exchange forwards	$	1,838	$	(9,941)	Foreign currency transaction (gains) losses, net

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Fair Value Measurements (Tables)

3 Months Ended

Mar. 31, 2014

Fair Value Measurements [Abstract]

Schedule of Fair Value Measurements on a Recurring Basis

	Fair Value as of March 31, 2014
	Quoted prices in		Significant
	active markets		other		Significant
	for identical		observable		unobservable
	assets or liabilities		inputs		inputs
($ thousands)	(Level 1)		(Level 2)		(Level 3)			Total	Balance Sheet Classification
Cash equivalents	$	118,871	$	-	$	-	$	118,871	Cash and cash equivalents and other current assets
	Fair Value as of December 31, 2013
	Quoted prices in		Significant
	active markets		other		Significant
	for identical		observable		unobservable
	assets or liabilities		inputs		inputs
($ thousands)	(Level 1)		(Level 2)		(Level 3)			Total	Balance Sheet Classification
Cash equivalents	$	37,870	$	-	$	-	$	37,870	Cash and cash equivalents and other current assets
Derivative assets:
Foreign currency contracts		-		13,501		-		13,501	Prepaid expenses and other current assets and other assets
Derivative liabilities:
Foreign currency contracts	$	-	$	984	$	-	$	984	Accrued expense and other current liabilities

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Schedule Of Restricted Stock Award and Restricted Stock Unit Activity (Details) (USD $)	3 Months Ended
	Mar. 31, 2014		Mar. 31, 2013
Restricted Stock Awards [Member]
Schedule of Restricted Stock Award and Restricted Stock Unit Activity [Line Items]
Nonvested beginning balance	210,490		355,509
Vested	(15,398)	[1]	(17,206)	[1]
Forfeited or expired	(137,055)		(10,800)
Nonvested ending balance	58,037		327,503
Weighted average grant date fair value beginning balance	$ 13.43		$ 13.37
Weighted average grant date fair value of vested	$ 16.68	[1]	$ 16.86	[1]
Weighted average grant date fair value of forfeited or expired	$ 12.44		$ 12.51
Weighted average grant date fair value ending balance	$ 14.89		$ 13.22
Restricted Stock Units [Member]
Schedule of Restricted Stock Award and Restricted Stock Unit Activity [Line Items]
Nonvested beginning balance	1,965,667		1,414,661
Granted	1,348,977		1,406,017
Vested	(408,564)	[2]	(194,687)	[2]
Forfeited or expired	(292,526)		(176,447)
Nonvested ending balance	2,613,554		2,449,544
Weighted average grant date fair value beginning balance	$ 16.50		$ 20.61
Weighted average grant date fair value of granted	$ 16.44		$ 14.94
Weighted average grant date fair value of vested	$ 17.09	[2]	$ 21.19	[2]
Weighted average grant date fair value of forfeited or expired	$ 18.35		$ 24.04
Weighted average grant date fair value ending balance	$ 16.17		$ 17.06

[1] The RSAs vested during the three months ended March 31, 2014 and 2013 consisted entirely of time-based awards.

[2] The RSUs vested during the three months ended March 31, 2014 consisted of 30,946 performance-based awards and 377,618 time-based awards. The RSUs vested during the three months ended March 31, 2013 consisted of 52,288 performance-based awards and 142,399 time-based awards.

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Goodwill & Intangible Assets Future Amortization Schedule (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2014	Dec. 31, 2013
Goodwill & Intangible Assets [Abstract]
Remainder of 2014	$ 10,108
2015	14,717
2016	14,285
2017	11,663
2018	9,702
Thereafter	18,340
Net Carrying Amount, Finite-Lived Intangible Assets	$ 78,815	$ 72,217

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Revolving Credit Facility & Bank Borrowings (Tables)

3 Months Ended

Mar. 31, 2014

Debt Disclosure [Abstract]

Schedule of Maturities of Long-Term Debt

Fiscal years ending December 31,
Remainder of 2014	$	5,169
2015		5,305
2016		4,150
2017		885
2018		-
Thereafter		-
Total principal debt maturities	$	15,509

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Stock-Based Compensation (Tables)

3 Months Ended

Mar. 31, 2014

Stock Based Compensation [Abstract]

Schedule Of Stock Options

	Three Months Ended March 31,
	2014			2013
Options	Options		Weighted Average Exercise Price	Options		Weighted Average Exercise Price
Outstanding at December 31, 2013 and 2012, respectively	2,105,152	$	13.34	2,621,686	$	13.03
Granted	24,000		15.33	79,500		15.29
Exercised	(73,557)		7.05	(97,309)		6.20
Forfeited or expired	(35,287)		18.07	(63,200)		18.48
Outstanding at March 31	2,020,308	$	13.51	2,540,677	$	13.24

Schedule of Performance-based RSU Vesting Schedule

Time Vested RSUs (50% of Award)	Performance Vested RSUs (50% of Award)
Vest in 3 annual installments beginning one year after the date of grant	Performance Goals (weighted equally)	Potential Award	Further Time Vesting
	Achievement of at least 70% of a one-year cumulative earnings per share performance goal. Achievement of at least 90% of 2014 revenue target.	Executive may earn from 50% to 200% of the target number of RSUs based on the level of achievement of the performance goal.	Earned RSUs vest 50% upon satisfaction of performance goal and 50% one year later.

Schedule of Restricted Stock Awards

	Three Months Ended March 31,
	2014			2013
Restricted Stock Awards	Shares		Weighted Average Grant Date Fair Value	Shares		Weighted Average Grant Date Fair Value
Outstanding at December 31, 2013 and 2012, respectively	210,490	$	13.43	355,509	$	13.37
Granted	-		-	-		-
Vested (1)	(15,398)		16.68	(17,206)		16.86
Forfeited or expired	(137,055)		12.44	(10,800)		12.51
Outstanding at March 31	58,037	$	14.89	327,503	$	13.22

(1)The RSAs vested during the three months ended March 31, 2014 and 2013 consisted entirely of time-based awards.

Schedule Of Restricted Stock Units

	Three Months Ended March 31,
	2014			2013
Restricted Stock Units	Units		Weighted Average Grant Date Fair Value	Units		Weighted Average Grant Date Fair Value
Outstanding at December 31, 2013 and 2012, respectively	1,965,667	$	16.50	1,414,661	$	20.61
Granted	1,348,977		16.44	1,406,017		14.94
Vested (1)	(408,564)		17.09	(194,687)		21.19
Forfeited or expired	(292,526)		18.35	(176,447)		24.04
Outstanding at March 31	2,613,554	$	16.17	2,449,544	$	17.06

(1)The RSUs vested during the three months ended March 31, 2014 consisted of 30,946 performance-based awards and 377,618 time-based awards. The RSUs vested during the three months ended March 31, 2013 consisted of 52,288 performance-based awards and 142,399 time-based awards.

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Condensed Consolidated Statements of Cash Flows (Parenthetical) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Condensed Consolidated Statements Of Cash Flows [Abstract]
Series A preferred share issuance costs	$ 15.8	$ 0

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Earnings Per Share (Tables)

3 Months Ended

Mar. 31, 2014

Earnings Per Share [Abstract]

Earnings Per Share Summary

	Three Months Ended March 31,
($ thousands, except per share data)	2014		2013
Numerator
Net income attributable to common stockholders	$	6,373	$	28,961
Less: adjustment for income allocated to participating securities		(868)		(115)
Net income attributable to common stockholders - basic and diluted	$	5,505	$	28,846
Denominator
Weighted average common shares outstanding - basic		88,239		87,781
Plus: dilutive effect of stock options and unvested restricted stock units		1,300		891
Weighted average common shares outstanding - diluted		89,539		88,672
Net income attributable per common share:
Basic	$	0.06	$	0.33
Diluted	$	0.06	$	0.33

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Retail Store Closings (Details) (USD $) In Millions, unless otherwise specified	Mar. 31, 2014
Property And Equipment [Abstract]
Accrued liability related to store closures	$ 0.7

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Share-Based Compensation Expense (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Share-based Arrangements with Employees and Nonemployees [Abstract]
Share-based compensation expense	$ 4.7	$ 3.5
Capitalized share-based compensation expense	$ 0.1	$ 0.2

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Condensed Consolidated Statements Of Income (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Condensed Consolidated Statements of Income [Abstract]
Revenues	$ 312,429	$ 311,656
Cost of sales	156,202	145,807
Gross profit	156,227	165,849
Selling, general and administrative expenses	139,405	128,199
Income from operations	16,822	37,650
Foreign currency transaction losses, net	2,768	2,600
Interest income	(477)	(306)
Interest expense	191	209
Other income, net	(141)	(28)
Income before income taxes	14,481	35,175
Income tax expense	5,357	6,214
Net income	9,124	28,961
Dividends on Series A convertibles preferred shares	2,133
Dividend equivalents on Series A convertible preferred shares related to redemption value accretion and beneficial conversion feature	618
Net income attributable to common stockholders	$ 6,373	$ 28,961
Net income per common share (Note 11):
Basic	$ 0.06	$ 0.33
Diluted	$ 0.06	$ 0.33

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Summary of Accrued Expenses and Other Current Liabilities (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2014		Dec. 31, 2013
Accrued Expenses And Other Current Liabilities [Abstract]
Accrued compensation and benefits	$ 26,559		$ 26,903
Professional services	19,824		14,128
Fulfillment, freight, and duties	15,489		12,565
Sales/use and VAT tax payable	14,393		9,142
Accrued rent and occupancy	11,850		12,198
Accrued legal	10,296		8,722
Customer deposits	7,043		6,940
Dividends payable	2,133
Other	11,540	[1]	6,513	[1]
Total accrued expenses and other current liabilities	$ 119,127		$ 97,111

[1] The amounts in ‘Other’ consist of various accrued expenses and no individual item accounted for more than 5% of the total balance at March 31, 2014 or December 31, 2013.

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Condensed Consolidated Balance Sheets (Parenthetical) (USD $) In Thousands, except Share data, unless otherwise specified	Mar. 31, 2014	Dec. 31, 2013
Condensed Consolidated Balance Sheets [Abstract]
Allowances	$ 14,513	$ 10,513
Series A preferred shares, par value	$ 0.001	$ 0.001
Series A preferred shares, issued and outstanding	200,000	200,000
Series A preferred shares, redemption value and liquidation preference	$ 202,133	$ 0
Preferred shares, par value	$ 0.001	$ 0.001
Preferred shares, authorized	5,000,000	5,000,000
Preferred shares, outstanding	0	0
Common shares, par value	$ 0.001	$ 0.001
Common shares, authorized	250,000,000	250,000,000
Common shares, issued	91,987,136	91,662,656
Common shares, outstanding	87,888,964	88,450,203
Treasury stock, shares	4,098,172	3,212,453

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Earnings Per Share Summary (Details) (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Earnings Per Share [Abstract]
Net income attributable to common shareholders	$ 6,373	$ 28,961
Less: adjustment for income allocated to participating securities	(868)	(115)
Net income attributable to common stockholders - basic and diluted	$ 5,505	$ 28,846
Weighted average common shares outstanding - basic	88,239	87,781
Plus: dilutive effect of stock options and unvested restricted stock units	1,300	891
Weighted average common shares outstanding - diluted	89,539	88,672
Basic	$ 0.06	$ 0.33
Diluted	$ 0.06	$ 0.33

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Inventories (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2014	Dec. 31, 2013
Inventories [Abstract]
Finished goods	$ 185,563	$ 154,272
Work-in-progress	491	685
Raw materials	6,322	7,384
Inventories	$ 192,376	$ 162,341

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Purchase Commitments (Details) (USD $) In Millions, unless otherwise specified	Mar. 31, 2014
Commitments And Contingencies [Abstract]
Purchase commitments with third party manufacturers	$ 210.4

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Operating Segments and Geographic Information

3 Months Ended

Mar. 31, 2014

Operating Segments And Geographic Information [Abstract]

Operating Segments And Geographic Information

14. OPERATING SEGMENTS & GEOGRAPHIC INFORMATION

We have four reportable operating segments based on the geographic nature of our operations: Americas, Asia Pacific, Japan and Europe. We also have an “Other businesses” category which aggregates insignificant operating segments that do not meet the reportable threshold and represent manufacturing operations located in Mexico, Italy and Asia. The composition of our reportable operating segments is consistent with that used by our Chief Operating Decision Maker (“CODM”) to evaluate performance and allocate resources.

Each of our reportable operating segments derives its revenues from the sale of footwear, apparel 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 the “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.

The primary financial measure utilized by the CODM to evaluate performance and allocate resources is segment operating income. Segment performance evaluation is based primarily on segment results without allocating corporate expenses, or indirect general, administrative and other expenses. Segment profits or losses of our reportable operating segments include adjustments to eliminate intersegment profit or losses on intersegment sales. As such, reconciling items for segment operating income represent unallocated corporate and other expenses as well as intersegment eliminations. Segment assets consist of cash and cash equivalents, accounts receivable and inventory as these balances are regularly reviewed by the CODM.

The following table sets forth information related to our reportable operating business segments during the three months ended March 31, 2014 and 2013:

	Three Months Ended
	March 31,
($ thousands)	2014		2013
Revenues:
Americas	$	117,120	$	129,429
Asia Pacific		101,865		90,457
Japan		29,050		30,359
Europe		64,136		61,346
Total segment revenues		312,171		311,591
Other businesses		258		65
Total consolidated revenues	$	312,429	$	311,656
Operating income:
Americas	$	13,437	$	20,813
Asia Pacific		27,683		27,103
Japan		6,462		7,560
Europe		7,539		12,671
Total segment operating income		55,121		68,147
Reconciliation of total segment operating income to income before income taxes:
Other businesses		(3,756)		(3,877)
Intersegment eliminations		15		15
Unallocated corporate and other (1)		(34,558)		(26,635)
Total consolidated operating income		16,822		37,650
Foreign currency transaction losses, net		2,768		2,600
Interest income		(477)		(306)
Interest expense		191		209
Other income, net		(141)		(28)
Income before income taxes	$	14,481	$	35,175
Depreciation and amortization:
Americas	$	2,448	$	2,542
Asia Pacific		1,406		1,278
Japan		334		401
Europe		902		1,150
Total segment depreciation and amortization		5,090		5,371
Other businesses		1,599		2,117
Unallocated corporate and other (1)		2,684		2,776
Total consolidated depreciation and amortization	$	9,373	$	10,264

(1)Includes a corporate component consisting primarily of corporate support and administrative functions, costs associated with share-based compensation, research and development, brand marketing, legal, 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 following table sets forth asset information related to our reportable operating business segments as of March 31, 2014 and December 31, 2013:

	March 31,		December 31,
($ thousands)	2014		2013
Assets:
Americas	$	200,229	$	139,855
Asia Pacific		204,536		177,343
Japan		51,154		51,155
Europe		139,142		137,701
Total segment current assets		595,061		506,054
Other businesses		21,710		14,093
Unallocated corporate and other(1)		193,624		63,743
Deferred tax assets, net		4,521		4,440
Income tax receivable		14,004		10,630
Other receivables		17,025		11,942
Prepaid expenses and other current assets		34,559		29,175
Total current assets		880,504		640,077
Property and equipment, net		86,413		86,971
Intangible assets, net		81,415		74,822
Deferred tax assets, net		19,688		19,628
Other assets		40,930		53,661
Total consolidated assets	$	1,108,950	$	875,159

(1)Corporate assets primarily consist of cash and equivalents which increased predominately due to net cash proceeds from our investment with Blackstone. See Note 12 – Series A Preferred Stock for further details regarding the preferred share offering.

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Summary of Property & Equipment (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2014		Dec. 31, 2013
Property And Equipment [Abstract]
Machinery and equipment	$ 52,843		$ 52,003
Leasehold improvements	101,761		93,235
Furniture, fixtures, and other	25,756		23,653
Construction-in-progress	8,915		16,231
Property and equipment, gross	189,275	[1]	185,122	[1]
Less: Accumulated depreciation	(102,862)	[2]	(98,151)	[2]
Property and equipment, net	$ 86,413		$ 86,971

[1] Includes $0.1 million and $0.1 million of certain equipment held under capital leases and classified as equipment as of March 31, 2014 and December 31, 2013, respectively.

[2] Includes $0.1 million and $0.1 million of accumulated depreciation related to certain equipment held under capital leases as of March 31, 2014 and December 31, 2013, respectively, which are depreciated using the straight-line method over the lease term.

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Inventories (Tables)

3 Months Ended

Mar. 31, 2014

Inventories [Abstract]

Schedule of Inventory

($ thousands)	March 31, 2014		December 31, 2013
Finished goods	$	185,563	$	154,272
Work-in-progress		491		685
Raw materials		6,322		7,384
Inventories	$	192,376	$	162,341

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Operating Segments and Geographic Information Assets (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2014		Dec. 31, 2013
Segment Reporting Information [Line Items]
Total current deferred tax assets	$ 4,521		$ 4,440
Income tax receivable	14,004		10,630
Other receivables	17,025		11,942
Prepaid expenses and other current assets	34,559		29,175
Total current assets	880,504		640,077
Property and equipment, net	86,413		86,971
Intangible assets, net	81,415		74,822
Total non-current deferred tax assets	19,688		19,628
Other assets	40,930		53,661
Total assets	1,108,950		875,159
Americas [Member]
Segment Reporting Information [Line Items]
Total current assets	200,229		139,855
Asia Pacific [Member]
Segment Reporting Information [Line Items]
Total current assets	204,536		177,343
Japan [Member]
Segment Reporting Information [Line Items]
Total current assets	51,154		51,155
Europe [Member]
Segment Reporting Information [Line Items]
Total current assets	139,142		137,701
Total Segment Current Assets [Member]
Segment Reporting Information [Line Items]
Total current assets	595,061		506,054
Other businesses [Member]
Segment Reporting Information [Line Items]
Total current assets	21,710		14,093
Unallocated corporate and other [Member]
Segment Reporting Information [Line Items]
Total current assets	$ 193,624	[1]	$ 63,743	[1]

[1] Corporate assets primarily consist of cash and equivalents which increased predominately due to net cash proceeds from our investment with Blackstone. See Note 12 - Series A Preferred Stock for further details regarding the preferred share offering.

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Condensed Consolidated Statements Of Cash Flows (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Cash flows from operating activities:
Net income	$ 9,124	$ 28,961
Depreciation and amortization	9,373	10,264
Unrealized (gain) loss on foreign exchange, net	(5,708)	2,982
Provision for doubtful accounts, net	768	697
Share based compensation	4,621	3,540
Other non-cash items	49	419
Accounts receivable	(103,188)	(87,946)
Inventories	(30,484)	(16,055)
Prepaid expenses and other assets	2,514	(4,354)
Accounts payable	31,675	21,488
Accrued expenses and other liabilities	20,943	5,841
Income taxes	(2,425)	(443)
Cash used in operating activities	(62,738)	(34,606)
Cash flows from investing activities:
Cash paid for purchases of property and equipment	(5,089)	(9,889)
Proceeds from disposal of property and equipment		515
Cash paid for intangible assets	(10,247)	(5,745)
Restricted cash	(583)	(1,279)
Cash used in investing activities	(15,919)	(16,398)
Cash flows from financing activities:
Proceeds from preferred stock offering, net of issuance costs of $15.8 million and $0.0 million, respectively	182,220
Proceeds from bank borrowings		12,173
Repayment of bank borrowings and capital lease obligations	(1,295)	(9,504)
Issuances of common stock	518	603
Purchase of treasury stock	(13,031)	(12,661)
Repurchase of common stock for tax withholding	(669)
Cash provided by (used in) financing activities	167,743	(9,389)
Effect of exchange rate changes on cash	5,576	(1,282)
Net decrease in cash and cash equivalents	94,662	(61,675)
Cash and cash equivalents - beginning of period	317,144	294,348
Cash and cash equivalents - end of period	411,806	232,673
Supplemental disclosure of cash flow information-cash paid during the period for:
Interest	152	499
Income taxes	7,213	5,872
Supplemental disclosure of non-cash, investing, and financing activities:
Assets acquired under capitalized leases		61
Accrued purchases of property and equipment	1,612	2,380
Accrued purchases of intangibles	5,088	768
Accrued dividends	2,133
Accretion of dividend equivalents	$ 618

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Condensed Consolidated Statements of Comprehensive Income (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Condensed Consolidated Statements Of Comprehensive Income (Loss) [Abstract]
Net income	$ 9,124	$ 28,961
Other comprehensive income (loss):
Foreign currency translation	(980)	(4,317)
Reclassification of cumulative foreign exchange translation adjustments to net income, net of tax of $0 and $(3), respectively		299
Total comprehensive income	$ 8,144	$ 24,943

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Stock-Based Compensation

3 Months Ended

Mar. 31, 2014

Stock Based Compensation [Abstract]

Stock-Based Compensation

9. STOCK-BASED COMPENSATION

Stock-based compensation expense is recognized on a straight-line basis over the applicable vesting period. During the three months ended March 31, 2014 and 2013, $4.7 million and $3.5 million, respectively, of stock-based compensation expense was recorded,  of which $0.1 million and  $0.2  million, respectively, related to the implementation of our ERP system was capitalized to intangible assets.

Stock Options

Options granted generally vest over four years with the first year vesting on a cliff basis followed by monthly vesting for the remaining three years.

The following table summarizes the stock option activity for the three months ended March 31, 2014 and 2013:

	Three Months Ended March 31,
	2014			2013
Options	Options		Weighted Average Exercise Price	Options		Weighted Average Exercise Price
Outstanding at December 31, 2013 and 2012, respectively	2,105,152	$	13.34	2,621,686	$	13.03
Granted	24,000		15.33	79,500		15.29
Exercised	(73,557)		7.05	(97,309)		6.20
Forfeited or expired	(35,287)		18.07	(63,200)		18.48
Outstanding at March 31	2,020,308	$	13.51	2,540,677	$	13.24

Restricted Stock Awards and Units

From time to time, we grant restricted stock awards (“RSA”) and restricted stock units (“RSU”) to our employees. RSAs and RSUs generally vest over three or four years depending on the terms of the grant.Unvested RSAs have the same rights as those of common shares including voting rights and non-forfeitable dividend rights. However, ownership of unvested RSAs cannot be transferred until they are vested. An unvested RSU is a contractual right to receive a share of common stock only upon its vesting. RSUs have dividend equivalent rights which accrue over the term of the award and are paid if and when the RSUs vest, but they have no voting rights.

We typically grant time-based RSUs and performance-based RSUs. Time-based RSUs are typically granted on an annual basis to certain non-executive employees and vest in three annual installments on a straight-line basis beginning one year after the grant date. During the three months ended March 31, 2014 and 2013, the board of directors approved grants of 0.3 million and 0.8 million, respectively, of RSUs to certain non-executives. Performance-based RSUs are typically granted on an annual basis to certain executive employees and consist of a time-based and performance-based component. During the three months ended March 31, 2104 and 2013, the board of directors approved the grant of an aggregate of 1.0 million and 0.6 million, respectively, of RSUs to certain executives as part of a performance incentive program. During the three months ended March 31, 2014 and 2013, we recorded  $3.7 million and $2.7 million, respectively, of stock-based payment expense related to RSUs. The following represents the vesting schedule of performance-based RSUs granted in 2014:

Time Vested RSUs (50% of Award)	Performance Vested RSUs (50% of Award)
Vest in 3 annual installments beginning one year after the date of grant	Performance Goals (weighted equally)	Potential Award	Further Time Vesting
	Achievement of at least 70% of a one-year cumulative earnings per share performance goal. Achievement of at least 90% of 2014 revenue target.	Executive may earn from 50% to 200% of the target number of RSUs based on the level of achievement of the performance goal.	Earned RSUs vest 50% upon satisfaction of performance goal and 50% one year later.

The following table summarizes the RSA activity for the three months ended March 31, 2014 and 2013:

	Three Months Ended March 31,
	2014			2013
Restricted Stock Awards	Shares		Weighted Average Grant Date Fair Value	Shares		Weighted Average Grant Date Fair Value
Outstanding at December 31, 2013 and 2012, respectively	210,490	$	13.43	355,509	$	13.37
Granted	-		-	-		-
Vested (1)	(15,398)		16.68	(17,206)		16.86
Forfeited or expired	(137,055)		12.44	(10,800)		12.51
Outstanding at March 31	58,037	$	14.89	327,503	$	13.22

(1)The RSAs vested during the three months ended March 31, 2014 and 2013 consisted entirely of time-based awards.

The following table summarizes the RSU activity for the three months ended March 31, 2014 and 2013:

	Three Months Ended March 31,
	2014			2013
Restricted Stock Units	Units		Weighted Average Grant Date Fair Value	Units		Weighted Average Grant Date Fair Value
Outstanding at December 31, 2013 and 2012, respectively	1,965,667	$	16.50	1,414,661	$	20.61
Granted	1,348,977		16.44	1,406,017		14.94
Vested (1)	(408,564)		17.09	(194,687)		21.19
Forfeited or expired	(292,526)		18.35	(176,447)		24.04
Outstanding at March 31	2,613,554	$	16.17	2,449,544	$	17.06

(1)The RSUs vested during the three months ended March 31, 2014 consisted of 30,946 performance-based awards and 377,618 time-based awards. The RSUs vested during the three months ended March 31, 2013 consisted of 52,288 performance-based awards and 142,399 time-based awards.

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Document And Entity Information	3 Months Ended
	Mar. 31, 2014	Apr. 25, 2014
Document And Entity Information[Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Mar. 31, 2014
Document Fiscal Period Focus	Q1
Document Fiscal Year Focus	2014
Entity Registrant Name	Crocs, Inc.
Entity Central Index Key	0001334036
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Common stock outstanding		87,532,602
Trading Symbol	crox

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Income Taxes

3 Months Ended

Mar. 31, 2014

Income Taxes [Abstract]

Income Taxes

10. INCOME TAXES

During the three months ended March 31, 2014, we recognized an income tax expense of $5.4 million on pre-tax income of $14.5 million, representing an effective income tax expense rate of 37.0% compared to an income tax expense  of  $6.2 million on pre-tax income of $35.2 million, representing an effective income tax expense rate of 17.7% for the same period in 2013.

The increase in effective tax rate compared to the same period in 2013 is primarily the result of increased profitability in higher tax jurisdictions and losses recorded in tax jurisdictions for which no tax benefits are being recorded.  Our effective tax rates for all periods presented also differ from the federal U.S. statutory rate due to differences between income tax rates between U.S. and foreign jurisdictions.We had unrecognized tax benefits of $31.2 million at March 31, 2014 and $31.6 million at December 31, 2013.

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Condensed Consolidated Statements of Comprehensive Income (Parenthetical) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Condensed Consolidated Statements Of Comprehensive Income (Loss) [Abstract]
Tax Effect of Foreign Currency Translation Adjustment	$ 0	$ (3)

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Goodwill & Intangible Assets

3 Months Ended

Mar. 31, 2014

Goodwill & Intangible Assets [Abstract]

Goodwill & Intangible Assets

4. GOODWILL & INTANGIBLE ASSETS

The following table summarizes the goodwill and identifiable intangible assets as of March 31, 2014 and December 31, 2013:

	March 31, 2014								December 31, 2013
($ thousands)	Gross Carrying Amount			Accumulated Amortization			Net Carrying Amount		Gross Carrying Amount			Accumulated Amortization			Net Carrying Amount
Capitalized software	$	129,013	(1)	$	(53,051)	(2)	$	75,962	$	118,940	(1)	$	(49,665)	(2)	$	69,275
Customer relationships		6,781			(6,437)			344		6,878			(6,439)			439
Patents, copyrights, and trademarks		6,626			(4,462)			2,164		6,501			(4,272)			2,229
Core technology		4,378			(4,378)			-		4,548			(4,548)			-
Other		981			(636)			345		983			(709)			274
Total finite lived intangible assets		147,779			(68,964)			78,815		137,850			(65,633)			72,217
Indefinite lived intangible assets		101			-			101		97			-			97
Goodwill		2,499			-			2,499		2,508			-			2,508
Intangible assets	$	150,379		$	(68,964)		$	81,415	$	140,455		$	(65,633)		$	74,822

(1)Includes $4.1 million of software held under a capital lease classified as capitalized software as of March 31, 2014 and December 31, 2013.

(2)Includes $2.1 million and $1.9 million of accumulated amortization of software held under a capital lease as of March 31, 2014 and December 31, 2013, respectively, which is amortized using the straight-line method over the useful life.

During  the three months ended March 31, 2014 and 2013, amortization expense recorded for intangible assets with finite lives was $4.0 million and $4.2 million, respectively, of which $1.3 million and $1.6 million, respectively, was recorded in ‘Cost of sales’, with the remaining amounts recorded in ‘Selling, general and administrative expenses’ in the condensed consolidated statements of income.

The following table summarizes estimated future annual amortization of intangible assets as of March 31, 2014:

	Amortization
Fiscal years ending December 31,	($ thousands)
Remainder of 2014	$	10,108
2015		14,717
2016		14,285
2017		11,663
2018		9,702
Thereafter		18,340
Total	$	78,815

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Property And Equipment

3 Months Ended

Mar. 31, 2014

Property And Equipment [Abstract]

Property And Equipment

3. PROPERTY & EQUIPMENT

The following table summarizes property and equipment by major classification as of March 31, 2014 and December 31, 2013:

	March 31,		December 31,
($ thousands)	2014		2013
Machinery and equipment	$	52,843	$	52,003
Leasehold improvements		101,761		93,235
Furniture, fixtures and other		25,756		23,653
Construction-in-progress		8,915		16,231
Property and equipment, gross (1)		189,275		185,122
Less: Accumulated depreciation (2)		(102,862)		(98,151)
Property and equipment, net	$	86,413	$	86,971

(1)Includes $0.1 million and $0.1 million of certain equipment held under capital leases and classified as equipment as of March 31, 2014 and December 31, 2013, respectively.

(2)Includes $0.1 million and $0.1 million of accumulated depreciation related to certain equipment held under capital leases as of March 31, 2014 and December 31, 2013,  respectively, which are depreciated using the straight-line method over the lease term.

During the three months ended March 31, 2014 and 2013, we recorded $5.4 million and $6.1 million, respectively, in depreciation expense of which $0.5 million and  $0.8 million,  respectively, was recorded in ‘Cost of sales’, with the remaining amounts recorded in ‘Selling, general and administrative expenses’ in the condensed consolidated statements of income.

Asset Impairments

We periodically evaluate all of our long-lived assets for impairment when events or circumstances would indicate the carrying value of a long-lived asset may not be fully recoverable. During the three months ended March 31, 2014 and 2013, we recorded no charges related to asset impairments.

Retail Store Closings

During the three months ended March 31, 2014, we closed two retail locations in our Europe segment which were not scheduled to close until future periods and were selected for closure by management based on historical and projected profitability levels, relocation plans, and other factors. As of March 31, 2014, we recorded a liability of approximately $0.7 million related to these locations in ‘Accrued expenses and other current liabilities’ on the condensed consolidated balance sheets with a related expense in ‘Selling, general and administrative expenses’ on the condensed consolidated statements of income. The calculation of accrued store closing reserves primarily includes future minimum lease payments from the date of closure to the end of the remaining lease term, net of contractual or estimated sublease income. We record the liability at fair value in the period in which the store is closed.

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Legal Proceedings

3 Months Ended

Mar. 31, 2014

Legal Proceedings [Abstract]

Legal Proceedings

15. LEGAL PROCEEDINGS

We and certain current and former officers and directors have been named as defendants in complaints filed by investors in the United States District Court for the District of Colorado. The first complaint was filed in November 2007 and several other complaints were filed shortly thereafter. These actions were consolidated and, in September 2008, the district court appointed a lead plaintiff and counsel. An amended consolidated complaint was filed in December 2008. The amended complaint purports to state claims under Sections 10(b), 20(a), and 20A of the Exchange Act on behalf of a class of all persons who purchased our common stock between April 2, 2007 and April 14, 2008 (the "Class Period"). The amended complaint also added our independent auditor as a defendant. The amended complaint alleges that, during the Class Period, the defendants made false and misleading public statements about us and our business and prospects and, as a result, the market price of our common stock was artificially inflated. The amended complaint also claims that certain current and former officers and directors traded in our common stock on the basis of material non-public information. The amended complaint seeks compensatory damages on behalf of the alleged class in an unspecified amount, including interest, and also added attorneys' fees and costs of litigation. On February 28, 2011, the District Court granted motions to dismiss filed by the defendants and dismissed all claims. A final judgment was thereafter entered. Plaintiffs subsequently appealed to the United States Court of Appeals for the Tenth Circuit. We and those current and former officers and directors named as defendants have entered into a Stipulation of Settlement with the plaintiffs that would, if approved by the United States District Court for the District of Colorado, resolve all claims asserted against us by the plaintiffs on behalf of the putative class, and plaintiffs' appeal would be dismissed. Our independent auditor is not a party to the Stipulation of Settlement. The Stipulation of Settlement received preliminary approval from the District Court on August 28, 2013. It remains subject to customary conditions, including final court approval following notice to stockholders. On February 13, 2014, a final settlement hearing took place and the parties are awaiting a final ruling on the settlement. If the settlement becomes final, all amounts required by the settlement will be paid by our insurers. There can be no assurance that the settlement will be finally approved by the District Court, or that approval by the District Court will, if challenged, be upheld by the Tenth Circuit.

On October 27, 2010, Spectrum Agencies (“Spectrum”) filed suit against our subsidiary, Crocs Europe B.V. (“Crocs Europe”), in the High Court of Justice, Queen’s Bench Division, Royal Courts of Justice in London, United Kingdom (“UK”). Spectrum acted as an agent for Crocs products in the UK from 2005 until Crocs Europe terminated the relationship on July 3, 2008 due to Spectrum’s breach of its duty to act in good faith towards Crocs Europe. Spectrum alleges that Crocs Europe unlawfully terminated the agency relationship and failed to pay certain sales commissions. A trial on the liability, not quantum (compensation and damages), was held at the High Court in London from November 30, 2011 to December 5, 2011. On December 16, 2011, the High Court of Justice issued a judgment that found that although Spectrum’s actions were a breach of its duty to act in good faith towards Crocs Europe the breach was not sufficiently severe to justify termination. We believe that the trial judge erred in his findings and subsequently appealed the judgment.  On October 30, 2012, the Court of Appeal handed down its judgment confirming the trial judge’s findings. We submitted a request to the Supreme Court seeking permission to appeal.  On April 24, 2013 the Supreme Court declined to grant permission to appeal.  Given that to date the legal proceedings in this case have only addressed liability, there have been no findings in relation to the amount of compensation or damages other than with respect to legal fees. Under English law, the prevailing party is entitled to reimbursement of reasonable legal fees incurred in the proceedings. We expect that Spectrum will now request to move to the damages phase via a case management conference, during which the Court will provide instructions and schedules leading up to the trial on damages.  Spectrum has not formally filed a court claim for compensation and damages and the amount will be assessed later in the proceedings.  A trial and judgment on damages could take up to 12 months.

We are currently subject to an audit by U.S. Customs & Border Protection (“CBP”) in respect of the period from 2006 to 2010.  In October 2013, CBP issued a revised final audit report. In that report CBP projects that unpaid duties totaling approximately $12.4 million are due for the period under review (a reduction from $14.3 million in the preliminary draft report issued in 2012).  We have responded that these projections are erroneous and provided arguments that demonstrate the amount due in connection with this matter is considerably less than the projection.  It is not possible at this time to predict whether our arguments will be successful in eliminating or reducing the amount in dispute.  CBP has stated that the final report will recommend collection of the duties due.  At this time, it is not possible to determine precisely when a notice of claim will be received from CBP, but currently we anticipate a notice of claim could be received sometime in the second or third quarter of 2014.  Likewise, it is not possible to predict with any certainty whether CBP will seek to assert a claim for penalties in addition to any unpaid duties, but such an assertion is a possibility.

Mexico’s Federal Tax Authority (“SAT”) audited the period from January 2006 to July 2011.  There were two phases to the audit, the first for capital equipment and finished goods and the second for raw materials.  The first phase was completed and no major discrepancies were noted by the SAT.  On January 9, 2013, Crocs received a notice for the second phase in which the SAT issued a tax assessment (taxes and penalties) of roughly 280.0 million pesos (approximately $22.0 million) based on the value of all of Crocs’ imported raw materials during the audit period.  We believe that the proposed penalty amount is unfounded and without merit. We filed an appeal by the deadline of March 15, 2013.  We have argued that the amount due in connection with the matter, if any, is substantially less than that proposed by the SAT.  In connection with the appeal, the SAT required us to post an appeal surety bond in the amount of roughly 321.0 million pesos (approximately $26.0 million), which amount reflects estimated additional penalties and interest if we are not successful on our appeal.  This amount will be adjusted on an annual basis. We expect it to take between two and three years for resolution of this matter in the Mexican courts.  It is not possible at this time to predict the outcome of this matter or reasonably estimate any potential loss.

As of March 31, 2014, we have accrued a total of $13.4 million relating to these litigation matters and other disputes. We estimate that the ultimate resolution of these litigation matters and other disputes could result in a loss that is reasonably possible between $0 and $10.3 million in the aggregate, in excess of the amount accrued.

Although we are subject to other litigation from time to time in the ordinary course of business, including employment, intellectual property and product liability claims, we are not party to any other pending legal proceedings that we believe will have a material adverse impact on our business, financial position, results of operations or cash flows.

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Earnings Per Share

3 Months Ended

Mar. 31, 2014

Earnings Per Share [Abstract]

Earnings Per Share

11. EARNINGS PER SHARE

The following table illustrates the basic and diluted EPS computations for the three months ended March 31, 2014 and 2013:

	Three Months Ended March 31,
($ thousands, except per share data)	2014		2013
Numerator
Net income attributable to common stockholders	$	6,373	$	28,961
Less: adjustment for income allocated to participating securities		(868)		(115)
Net income attributable to common stockholders - basic and diluted	$	5,505	$	28,846
Denominator
Weighted average common shares outstanding - basic		88,239		87,781
Plus: dilutive effect of stock options and unvested restricted stock units		1,300		891
Weighted average common shares outstanding - diluted		89,539		88,672
Net income attributable per common share:
Basic	$	0.06	$	0.33
Diluted	$	0.06	$	0.33

For the three months ended March 31, 2014 and 2013, approximately 1.5 million options and RSUs in total were not included in the calculation of diluted EPS as their effect would have been anti-dilutive. In addition to the antidilutive effects of options and RSUs, we did not assume the conversion of the Series A preferred stock into common shares for purposes of calculating diluted EPS as the effects would have been anti-dilutive. If converted, as of March 31, 2014, the Series A preferred stock would represent approximately 13.5% of our common stock outstanding or 13.8 million additional common shares. See Note 12 – Series A Preferred Stock for further details regarding the preferred share offering.

Stock Repurchase Plan Authorizations

We continue to evaluate options to maximize the returns on our cash and maintain an appropriate capital structure, including, among other alternatives, repurchases of our common stock. Subject to certain restrictions on repurchases under our revolving credit facility, we have authorization to repurchase up to $350.0 million of our common stock. The number, price, structure and timing of the repurchases, if any, will be at our sole discretion and future repurchases will be evaluated by us depending on market conditions, liquidity needs and other factors. Share repurchases may be made in the open market or in privately negotiated transactions. The repurchase authorization does not have an expiration date and does not oblige us to acquire any particular amount of our common stock. The board of directors may suspend, modify or terminate the repurchase program at any time without prior notice.

During the three months ended March 31, 2014, we repurchased approximately 0.9 million shares at a weighted average price of $14.94 for an aggregate price of approximately $13.0 million excluding related commission charges, under our publicly-announced repurchase plan.As of March 31, 2014, we had approximately $337.0 million available for repurchase under our repurchase authorization.

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Derivative Financial Instruments

3 Months Ended

Mar. 31, 2014

Derivative Financial Instruments [Abstract]

Derivative Financial Instruments

7. DERIVATIVE FINANCIAL INSTRUMENTS

We transact business in various foreign countries and are therefore exposed to foreign currency exchange rate risk inherent in revenues, costs, and monetary assets and liabilities denominated in non-functional currencies. We have entered into foreign currency exchange forward contracts and currency swap derivative instruments to selectively protect against volatility in the value of non-functional currency denominated monetary assets and liabilities, and of future cash flows caused by changes in foreign currency exchange rates. We do not designate these derivative instruments as hedging instruments under the accounting standards for derivatives and hedging. Accordingly, these instruments are recorded at fair value as a derivative asset or liability on the balance sheet with their corresponding change in fair value recognized in ‘Foreign currency transaction (gains) losses, net’ in our condensed consolidated statements of income. For purposes of the condensed consolidated statement of cash flows, we classify the cash flows at settlement from undesignated instruments in the same category as the cash flows from the related hedged items, generally within ‘Cash provided by (used in) operating activities’. See Note 6 – Fair Value Measurements for further details regarding the fair values of the corresponding derivative assets and liabilities. As of March 31, 2014, we did not have derivative assets or liabilities on our condensed consolidated balance sheets as all derivative forward contracts described in the table below were entered into on March 31, 2014.

The following table summarizes the notional amounts of the outstanding foreign currency exchange contracts at March 31, 2014 and December 31, 2013. The notional amounts of the derivative financial instruments shown below are denominated in their United States (“U.S.”) Dollar equivalents and represent the amount of all contracts of the foreign currency specified. These notional values do not necessarily represent amounts exchanged by the parties and, therefore, are not a direct measure of our exposure to the foreign currency exchange risks.

	March 31,		December 31,
($ thousands)	2014		2013
Foreign currency exchange forward contracts by currency:
Japanese Yen	$	67,413	$	68,707
Euro		52,850		38,577
Russian Ruble		38,754		17,588
British Pound Sterling		36,702		15,487
South Korean Won		34,867		12,100
Singapore Dollar		25,200		28,225
Mexican Peso		18,125		18,350
Australian Dollar		12,689		4,941
New Taiwan Dollar		8,779		3,463
South African Rand		7,746		3,076
Indian Rupee		5,525		2,150
Canadian Dollar		4,972		3,428
Hong Kong Dollar		3,533		1,844
New Zealand Dollar		2,468		943
Swedish Krona		2,222		1,615
Norwegian Krone		388		-
Total notional value, net	$	322,233	$	220,494
Latest maturity date	May 2014		December 2015

The following table presents the amounts affecting the condensed consolidated statements of income from derivative instruments for the three months endedMarch 31, 2014 and 2013:

	Three Months Ended March 31,
($ thousands)	2014		2013		Location of (Gain) Loss Recognized in Income on Derivatives
Foreign currency exchange forwards	$	1,838	$	(9,941)	Foreign currency transaction (gains) losses, net

The account 'Foreign currency transaction gains (losses), net' on the condensed consolidated statements of income includes both realized and unrealized gains/losses from underlying foreign currency activity and derivative contracts. These gains and losses are reported on a net basis. For the three months ended March 31, 2014, the net loss recognized of $2.8 million recorded on  the condensed consolidated statements of income is comprised of a $1.8 million net loss associated with our derivative instruments and a $1.0 million net loss associated with exposure from day-to-day business transactions in various foreign currencies. For the three months ended March 31, 2013, the net lossrecognized of $2.6 million recorded on the condensed consolidated statements of income is comprised of a $12.5 million net loss associated with exposure from day-to-day business transactions in various foreign currencies partially offset by a $9.9 million net gain associated with our derivative instruments.

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Earnings Per Share Summary Narrative (Details)	3 Months Ended
	Mar. 31, 2014
Earnings Per Share [Abstract]
Anti-dilutive options and RSUs not included in the calculation of diluted income (loss) per share	1,500,000
Percentage of common stock if-converted Series A preferred stock	13.50%
Anti-dilutive Series A preferred shares not included in the calculation of EPS	13,793,100

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Accrued Expenses And Other Current Liabilities

3 Months Ended

Mar. 31, 2014

Accrued Expenses And Other Current Liabilities [Abstract]

Accrued Expenses And Other Current Liabilities

5. ACCRUED EXPENSES & OTHER CURRENT LIABILITIES

The following table summarizes accrued expenses and other current liabilities as of March 31, 2014 and December 31, 2013:

	March 31,		December 31,
($ thousands)	2014		2013
Accrued compensation and benefits	$	26,559	$	26,903
Professional services		19,824		14,128
Fulfillment, freight and duties		15,489		12,565
Sales/use and VAT tax payable		14,393		9,142
Accrued rent and occupancy		11,850		12,198
Accrued legal		10,296		8,722
Customer deposits		7,043		6,940
Dividend payable		2,133		-
Other (1)		11,540		6,513
Total accrued expenses and other current liabilities	$	119,127	$	97,111

(1)The amounts in ‘Other’ consist of various accrued expenses and no individual item accounted for more than  5%  of the total balance at March 31, 2014 or December 31, 2013.

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Fair Value Measurements

3 Months Ended

Mar. 31, 2014

Fair Value Measurements [Abstract]

Fair Value Measurements

6. FAIR VALUE MEASUREMENTS

Recurring Fair Value Measurements

The following tables summarize the financial instruments required to be measured at fair value on a recurring basis as of March 31, 2014 and December 31, 2013:

	Fair Value as of March 31, 2014
	Quoted prices in		Significant
	active markets		other		Significant
	for identical		observable		unobservable
	assets or liabilities		inputs		inputs
($ thousands)	(Level 1)		(Level 2)		(Level 3)			Total	Balance Sheet Classification
Cash equivalents	$	118,871	$	-	$	-	$	118,871	Cash and cash equivalents and other current assets
	Fair Value as of December 31, 2013
	Quoted prices in		Significant
	active markets		other		Significant
	for identical		observable		unobservable
	assets or liabilities		inputs		inputs
($ thousands)	(Level 1)		(Level 2)		(Level 3)			Total	Balance Sheet Classification
Cash equivalents	$	37,870	$	-	$	-	$	37,870	Cash and cash equivalents and other current assets
Derivative assets:
Foreign currency contracts		-		13,501		-		13,501	Prepaid expenses and other current assets and other assets
Derivative liabilities:
Foreign currency contracts	$	-	$	984	$	-	$	984	Accrued expense and other current liabilities

Non-Recurring Fair Value Measurements

The majority of our non-financial instrument assets, which include inventories, property and equipment and intangible assets, are not required to be carried at fair value on a recurring basis. However, if certain triggering events occur such that a non-financial instrument is required to be evaluated for impairment and the carrying value is not recoverable, the carrying value would be adjusted to the lower of its cost or fair value and an impairment charge would be recorded.

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Bank Borrowings and Capital Lease Obligations

3 Months Ended

Mar. 31, 2014

Bank Borrowings And Capital Lease Obligations [Abstract]

Bank Borrowings And Capital Lease Obligations

8. REVOLVING CREDIT FACILITY & BANK BORROWINGS

Revolving Credit Facility

On December 16, 2011, we entered into an Amended and Restated Credit Agreement,  (as amended, the “Credit Agreement”) with the lenders named therein and PNC Bank, National Association (“PNC”), as a lender and administrative agent for the lenders.

On March 27, 2014, we entered into the Fourth Amendment to Amended and Restated Credit Agreement (the "Fourth Amendment"), pursuant to which certain terms of the Credit Agreement were amended. The Fourth Amendment primarily (i) alters the minimum fixed charge coverage ratio from 1.25 to 1.00 to a scaled quarterly ratio of 1.15 to 1.00 in the first and second quarters of 2014,1.20 to 1.00 in the third and fourth quarters of 2014 and 1.25 to 1.00 at the end of each quarter thereafter, and (ii) amends certain definitions of the financial covenants to become more favorable to us.

As of March 31, 2014 and December 31, 2013, we had no outstanding borrowings under the Credit Agreement. As of March 31, 2014 and December 31, 2013, we had issued and outstanding letters of credit of $7.3 million and $7.2 million, respectively, which were reserved against the borrowing base under the terms of the Credit Agreement. As of March 31, 2014, we were in compliance with all restrictive financial covenants under the Credit Agreement.

Long-term Bank Borrowings

On December 10, 2012, we entered into a Master Installment Payment Agreement (“Master IPA”) with PNC in which PNC finances our purchase of software and services, which may include but are not limited to third party costs to design, install and implement software systems, and associated hardware described in the schedules defined within the Master IPA. The Master IPA was entered into to finance our implementation of a new enterprise resource planning (“ERP”) system which began in October 2012 and is estimated to continue through late 2014. The terms of each note payable under the Master IPA consist of variable interest rates and payment terms based on amounts borrowed and timing of activity throughout the implementation of the ERP system.

As of March 31, 2014 and December 31, 2013, we had $15.5 million and $16.8 million, respectively, of long-term debt outstanding under five separate notes payable under the Master IPA, of which  $5.2 million and  $5.1 million, respectively, represent current installments. As of March 31, 2014, the notes bear interest rates ranging from 2.45% to 2.79% and maturities ranging from September 2016 to September 2017. As this debt arrangement relates solely to the construction and implementation of an ERP system for use by the entity, all interest expense incurred under the arrangement has been capitalized to the condensed consolidated balance sheets until the assets are ready for intended use and will be amortized over the useful life of the software upon that date. During the three months ended March 31, 2014 and 2013, we capitalized  $0.1 million and $0.0 million, respectively, in interest expense related to this debt arrangement to the condensed consolidated balance sheets.

The aggregate maturities of long-term bank borrowings at March 31, 2014 are as follows (in thousands):

Fiscal years ending December 31,
Remainder of 2014	$	5,169
2015		5,305
2016		4,150
2017		885
2018		-
Thereafter		-
Total principal debt maturities	$	15,509

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Operating Lease Rental Expense Narrative (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Operating Leases Rent Expense [Abstract]
CAM, parking and storage fees related to rent expense	$ 2.4	$ 2.4

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Government Tax Audits (Details) (Canadian Tax Authority [Member], USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2014
Canadian Tax Authority [Member]
Tax benefit from audit examination	$ 2.2

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Operating Lease Rental Expense (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2014		Mar. 31, 2013
Operating Leases Rent Expense [Abstract]
Minimum rentals	$ 29,242	[1]	$ 24,270	[1]
Contingent rentals	2,423		2,496
Less: Sublease rentals	(180)		(156)
Total rent expense	$ 31,485		$ 26,610

[1] Minimum rentals include all lease payments as well as fixed and variable common area maintenance (“CAM”), parking and storage fees, which were approximately $2.4 million during the three months ended March 31, 2014 and 2013.

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Operating Segments and Geographic Information (Tables)

3 Months Ended

Mar. 31, 2014

Operating Segments And Geographic Information [Abstract]

Schedule of Segment Income Statement

	Three Months Ended
	March 31,
($ thousands)	2014		2013
Revenues:
Americas	$	117,120	$	129,429
Asia Pacific		101,865		90,457
Japan		29,050		30,359
Europe		64,136		61,346
Total segment revenues		312,171		311,591
Other businesses		258		65
Total consolidated revenues	$	312,429	$	311,656
Operating income:
Americas	$	13,437	$	20,813
Asia Pacific		27,683		27,103
Japan		6,462		7,560
Europe		7,539		12,671
Total segment operating income		55,121		68,147
Reconciliation of total segment operating income to income before income taxes:
Other businesses		(3,756)		(3,877)
Intersegment eliminations		15		15
Unallocated corporate and other (1)		(34,558)		(26,635)
Total consolidated operating income		16,822		37,650
Foreign currency transaction losses, net		2,768		2,600
Interest income		(477)		(306)
Interest expense		191		209
Other income, net		(141)		(28)
Income before income taxes	$	14,481	$	35,175
Depreciation and amortization:
Americas	$	2,448	$	2,542
Asia Pacific		1,406		1,278
Japan		334		401
Europe		902		1,150
Total segment depreciation and amortization		5,090		5,371
Other businesses		1,599		2,117
Unallocated corporate and other (1)		2,684		2,776
Total consolidated depreciation and amortization	$	9,373	$	10,264

(1)Includes a corporate component consisting primarily of corporate support and administrative functions, costs associated with share-based compensation, research and development, brand marketing, legal, 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.

Schedule of Segment Balance Sheet

	March 31,		December 31,
($ thousands)	2014		2013
Assets:
Americas	$	200,229	$	139,855
Asia Pacific		204,536		177,343
Japan		51,154		51,155
Europe		139,142		137,701
Total segment current assets		595,061		506,054
Other businesses		21,710		14,093
Unallocated corporate and other(1)		193,624		63,743
Deferred tax assets, net		4,521		4,440
Income tax receivable		14,004		10,630
Other receivables		17,025		11,942
Prepaid expenses and other current assets		34,559		29,175
Total current assets		880,504		640,077
Property and equipment, net		86,413		86,971
Intangible assets, net		81,415		74,822
Deferred tax assets, net		19,688		19,628
Other assets		40,930		53,661
Total consolidated assets	$	1,108,950	$	875,159

(1)Corporate assets primarily consist of cash and equivalents which increased predominately due to net cash proceeds from our investment with Blackstone. See Note 12 – Series A Preferred Stock for further details regarding the preferred share offering.

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Long-Term Bank Borrowings Narrative (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013	Dec. 31, 2013
Debt Disclosure [Abstract]
Bank borrowings	$ 15.5		$ 16.8
Current maturities of long-term debt	5.2		5.1
Minimum interest rate on long-term debt	2.45%
Maximum interest rate on long-term debt	2.79%
Earliest maturity on long-term debt	Sep. 01, 2016
Latest maturity on long-term debt	Sep. 01, 2017
Long-term debt interest capitalized	$ 0.1	$ 0

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Commitments And Contingencies

3 Months Ended

Mar. 31, 2014

Commitments And Contingencies [Abstract]

Commitments And Contingencies

13. COMMITMENTS & CONTINGENCIES

Rental Commitments and Contingencies

We rent space for certain of our retail stores, offices, warehouses, vehicles, and equipment under operating leases expiring at various dates through 2033. Certain leases contain rent escalation clauses (step rents) that require additional rental amounts in the later years of the term. Rent expense for leases with step rents or rent holidays is recognized on a straight-line basis over the lease term. Deferred rent is included in the condensed consolidated balance sheets in ‘Accrued expenses and other current liabilities.’

The following table summarizes the composition of rent expense under operating leases for the three months ended March 31, 2014 and 2013 (in thousands):

		Three Months Ended March 31,
		2014		2013
Minimum rentals (1)	$	29,242	$	24,270
Contingent rentals		2,423		2,496
Less: Sublease rentals		(180)		(156)
Total rent expense	$	31,485	$	26,610

(1)Minimum rentals include all lease payments as well as fixed and variable common area maintenance (“CAM”), parking and storage fees, which were approximately $2.4 million during the three months ended March 31, 2014 and 2013.

Purchase Commitments

As of March 31, 2014, we had purchase commitments with certain third party manufacturers for $210.4 million.

Government Tax Audits

We are regularly subject to, and are currently undergoing, audits by tax authorities in the United States and several foreign jurisdictions for prior tax years.

In April 2014, we received a notice of proposed assessment on certain transfer pricing items from Canadian tax authorities, which closes the ongoing audit of our Canada operations through 2011. The assessment, along with the estimated impact on certain Canadian provinces, is less than the amount of the uncertain tax benefits recorded, and therefore, will result in a net tax benefit of approximately $2.2 million in the quarter ending June 30, 2014. We intend to pay the assessment, which includes tax and interest for these periods.

See Note 15—Legal Proceedings for further details regarding potential loss contingencies related to government tax audits and other current legal proceedings.

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Goodwill & Intangible Assets (Tables)

3 Months Ended

Mar. 31, 2014

Goodwill & Intangible Assets [Abstract]

Schedule of Goodwill & Intangible Assets

	March 31, 2014								December 31, 2013
($ thousands)	Gross Carrying Amount			Accumulated Amortization			Net Carrying Amount		Gross Carrying Amount			Accumulated Amortization			Net Carrying Amount
Capitalized software	$	129,013	(1)	$	(53,051)	(2)	$	75,962	$	118,940	(1)	$	(49,665)	(2)	$	69,275
Customer relationships		6,781			(6,437)			344		6,878			(6,439)			439
Patents, copyrights, and trademarks		6,626			(4,462)			2,164		6,501			(4,272)			2,229
Core technology		4,378			(4,378)			-		4,548			(4,548)			-
Other		981			(636)			345		983			(709)			274
Total finite lived intangible assets		147,779			(68,964)			78,815		137,850			(65,633)			72,217
Indefinite lived intangible assets		101			-			101		97			-			97
Goodwill		2,499			-			2,499		2,508			-			2,508
Intangible assets	$	150,379		$	(68,964)		$	81,415	$	140,455		$	(65,633)		$	74,822

(1)Includes $4.1 million of software held under a capital lease classified as capitalized software as of March 31, 2014 and December 31, 2013.

(2)Includes $2.1 million and $1.9 million of accumulated amortization of software held under a capital lease as of March 31, 2014 and December 31, 2013, respectively, which is amortized using the straight-line method over the useful life.

Schedule of Future Amortization of Intangible Assets

	Amortization
Fiscal years ending December 31,	($ thousands)
Remainder of 2014	$	10,108
2015		14,717
2016		14,285
2017		11,663
2018		9,702
Thereafter		18,340
Total	$	78,815

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Summary of Gain/Loss on Derivative Instruments (Details) (USD $)	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Derivative Financial Instruments [Abstract]
Foreign currency transaction losses, net	$ 2,768,000	$ 2,600,000
Foreign currency exchange forwards	1,838,000	(9,941,000)
Foreign currency transaction gains/losses, gross	$ 1,000,000	$ 12,500,000

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Summary Of Goodwill & Intangible Assets (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2014		Dec. 31, 2013
Intangible Assets [Line Items]
Gross Carrying Amount, Finite-Lived Intangible Assets	$ 147,779		$ 137,850
Accumulated Amortization, Finite-Lived Intangible Assets	(68,964)		(65,633)
Net Carrying Amount, Finite-Lived Intangible Assets	78,815		72,217
Indefinite lived intangible assets	101		97
Goodwill	2,499		2,508
Gross Carrying Amount, Total Intangible Assets	150,379		140,455
Net Carrying Amount, Total Intangible Assets	81,415		74,822
Capitalized Software [Member]
Intangible Assets [Line Items]
Gross Carrying Amount, Finite-Lived Intangible Assets	129,013	[1]	118,940	[1]
Accumulated Amortization, Finite-Lived Intangible Assets	(53,051)	[2]	(49,665)	[2]
Net Carrying Amount, Finite-Lived Intangible Assets	75,962		69,275
Customer Relationships [Member]
Intangible Assets [Line Items]
Gross Carrying Amount, Finite-Lived Intangible Assets	6,781		6,878
Accumulated Amortization, Finite-Lived Intangible Assets	(6,437)		(6,439)
Net Carrying Amount, Finite-Lived Intangible Assets	344		439
Patents, copyrights and trademarks [Member]
Intangible Assets [Line Items]
Gross Carrying Amount, Finite-Lived Intangible Assets	6,626		6,501
Accumulated Amortization, Finite-Lived Intangible Assets	(4,462)		(4,272)
Net Carrying Amount, Finite-Lived Intangible Assets	2,164		2,229
Core technology [Member]
Intangible Assets [Line Items]
Gross Carrying Amount, Finite-Lived Intangible Assets	4,378		4,548
Accumulated Amortization, Finite-Lived Intangible Assets	(4,378)		(4,548)
Other [Member]
Intangible Assets [Line Items]
Gross Carrying Amount, Finite-Lived Intangible Assets	981		983
Accumulated Amortization, Finite-Lived Intangible Assets	(636)		(709)
Net Carrying Amount, Finite-Lived Intangible Assets	$ 345		$ 274

[1] Includes $4.1 million of software held under a capital lease classified as capitalized software as of March 31, 2014 and December 31, 2013.

[2] Includes $2.1 million and $1.9 million of accumulated amortization of software held under a capital lease as of March 31, 2014 and December 31, 2013, respectively, which is amortized using the straight-line method over the useful life.

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Condensed Consolidated Balance Sheets (USD $) In Thousands, unless otherwise specified	Mar. 31, 2014	Dec. 31, 2013
Current assets:
Cash and cash equivalents	$ 411,806	$ 317,144
Accounts receivable, net of allowances of $14,513 and $10,513, respectively	206,213	104,405
Inventories	192,376	162,341
Deferred tax assets, net	4,521	4,440
Income tax receivable	14,004	10,630
Other receivables	17,025	11,942
Prepaid expenses and other current assets	34,559	29,175
Total current assets	880,504	640,077
Property and equipment, net	86,413	86,971
Intangible assets, net	81,415	74,822
Deferred tax assets, net	19,688	19,628
Other assets	40,930	53,661
Total assets	1,108,950	875,159
Current liabilities:
Accounts payable	89,130	57,450
Accrued expenses and other current liabilities	119,127	97,111
Deferred tax liabilities, net	11,193	11,199
Income taxes payable	16,924	15,992
Current portion of long-term borrowings and capital lease obligations	5,192	5,176
Total current liabilities	241,566	186,928
Long term income tax payable	36,508	36,616
Long-term borrowings and capital lease obligations	10,359	11,670
Other liabilities	15,934	15,201
Total liabilities	304,367	250,415
Commitments and contingencies (Note 13)
Series A convertible preferred shares, par value $0.001 per share, 200,000 shares issued and outstanding, redemption amount and liquidation preference of $202,133 and $0 at March 31, 2014 and December 31, 2013, respectively (Note 12)	182,838
Stockholders' equity:
Preferred shares, par value $0.001 per share, 5,000,000 shares authorized, none outstanding
Common shares, par value $0.001 per share, 250,000,000 shares authorized, 91,987,136 and 87,888,964 shares issued and outstanding, respectively, at March 31, 2014 and 91,662,656 and 88,450,203 shares issued and outstanding, respectively, at December 31, 2013	92	92
Treasury stock, at cost, 4,098,172 and 3,212,453 shares, respectively	(68,265)	(55,964)
Additional paid-in capital	325,441	321,532
Retained earnings	350,805	344,432
Accumulated other comprehensive income	13,672	14,652
Total stockholders' equity	621,745	624,744
Total liabilities and stockholders' equity	$ 1,108,950	$ 875,159

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Inventories

3 Months Ended

Mar. 31, 2014

Inventories [Abstract]

Inventories

2. INVENTORIES

The following table summarizes inventories by major classification as of March 31, 2014 and December 31, 2013:

($ thousands)	March 31, 2014		December 31, 2013
Finished goods	$	185,563	$	154,272
Work-in-progress		491		685
Raw materials		6,322		7,384
Inventories	$	192,376	$	162,341

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Income Taxes (Details) (USD $)	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013	Dec. 31, 2013
Income Tax Expense (Benefit) [Abstract]
Income tax expense	$ 5,357,000	$ 6,214,000
Income before taxes	14,481,000	35,175,000
Effective income tax rate	37.00%	17.70%
Unrecognized tax benefits	$ 31,200,000		$ 31,600,000

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Operating Segments and Geographic Information General (Details)	3 Months Ended
	Mar. 31, 2014 segment
Operating Segments And Geographic Information [Abstract]
Number of Reportable Segments	4

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Accrued Expenses and Other Current Liabilities (Tables)

3 Months Ended

Mar. 31, 2014

Accrued Expenses And Other Current Liabilities [Abstract]

Schedule of Accrued Expenses & Other Current Liabilities

	March 31,		December 31,
($ thousands)	2014		2013
Accrued compensation and benefits	$	26,559	$	26,903
Professional services		19,824		14,128
Fulfillment, freight and duties		15,489		12,565
Sales/use and VAT tax payable		14,393		9,142
Accrued rent and occupancy		11,850		12,198
Accrued legal		10,296		8,722
Customer deposits		7,043		6,940
Dividend payable		2,133		-
Other (1)		11,540		6,513
Total accrued expenses and other current liabilities	$	119,127	$	97,111

(1)The amounts in ‘Other’ consist of various accrued expenses and no individual item accounted for more than  5%  of the total balance at March 31, 2014 or December 31, 2013.

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Property & Equipment Depreciation Expense (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Property And Equipment [Abstract]
Depreciation Expense	$ 5.4	$ 6.1
Depreciation Expense Recorded in Cost of Sales	$ 0.5	$ 0.8

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Series A Preferred Stock

3 Months Ended

Mar. 31, 2014

Temporary Equity [Abstract]

Temporary equity

12. SERIES A PREFERRED STOCK

On January 27, 2014, we issued to Blackstone, and certain of its permitted transferees (together with Blackstone, the “Blackstone Purchasers”), 200,000 shares of our Series A preferred stock for an aggregate purchase price of $198.0 million, or $990 per share, pursuant to an Investment Agreement between us and Blackstone, dated December 28, 2013 (as amended, the “Investment Agreement”). In connection with the issuance of the Series A preferred stock (the “Closing”), we received proceeds of $182.2 million after deducting the issuance discount of $2.0 million and direct and incremental expenses of $15.8 million including financial advisory fees, closing costs, legal expenses and other offering-related expenses.

Participation Rights and Dividends

The Series A preferred stock ranks senior to our common stock with respect to dividend rights and rights on liquidation, winding-up and dissolution. The Series A preferred stock has a stated value of $1,000 per share, and holders of Series A preferred stock are entitled to cumulative dividends payable quarterly in cash at a rate of 6% per annum. If we fail to make timely dividend payments, the dividend rate will increase to 8% per annum until such time as all accrued but unpaid dividends have been paid in full. Holders of Series A preferred stock are entitled to receive dividends declared or paid on our common stock and are entitled to vote together with the holders of our common stock as a single class, in each case, on an as-converted basis. As of March 31, 2014, we had accrued dividends of $2.1 million on the condensed consolidated balance sheets, which were paid in cash to Blackstone on April 1, 2014. Holders of Series A preferred stock have certain limited special approval rights, including with respect to the issuance of pari passu or senior equity securities of the Company.

Conversion Features

The Series A preferred stock is convertible at the option of the holders at any time after the Closing into shares of common stock at an implied conversion price of $14.50 per share, subject to adjustment. At our election, all or a portion of the Series A preferred stock will be convertible into the relevant number of shares of common stock on or after the third anniversary of the Closing, if the closing price of the common stock equals or exceeds $29.00 for 20 consecutive trading days. The Series A preferred stock are convertible into 13,793,100 shares of our common stock based on the conversion rate currently in place. The conversion rate is subject to customary anti-dilution and other adjustments.

Redemption Features

At any time after the eighth anniversary of the Closing, we will have the right to redeem and the holders of the Series A preferred stock will have the right to require us to repurchase, all or any portion of the Series A preferred stock at 100% of the stated value thereof plus all accrued but unpaid dividends. Upon certain change of control events involving us, the holders can require us to repurchase the Series A preferred stock at 101% of the stated value thereof plus all accrued but unpaid dividends.

In accordance with FASB ASC Topic 480-10-S99-3A, SEC Staff Announcement: Classification and Measurement of Redeemable Securities, redemption features which are not solely within the control of the issuer are required to be presented outside of permanent equity on the condensed consolidated balance sheets. Under the Investment Agreement and as noted above, the holder has the option to redeem the Series A preferred stock any time after January 27, 2022 or upon a change in control. As such, the Series A preferred stock is presented in temporary or mezzanine equity on the condensed consolidated balance sheets and will be accreted up to the stated redemption value of $202.1 million using an appropriate accretion method over a redemption period of eight years, as this represents the earliest probable date at which the Series A preferred stock will become redeemable.

Designation of Board of Directors

The Investment Agreement grants Blackstone certain rights to designate directors to serve on our Board. For so long as Blackstone and its permitted transferees (i) beneficially own at least 95% of the Series A preferred stock or the as-converted common stock purchased pursuant to the Investment Agreement or (ii) maintain beneficial ownership of at least 12.5% of the our outstanding common stock (the "Two-Director Threshold"), Blackstone will have the right to designate for nomination two directors to our Board. For so long as Blackstone and its permitted transferees beneficially own shares of Series A preferred stock or the as-converted common stock purchased pursuant to the Investment Agreement that represent less than the Two-Director Threshold but more than 25% of the number of shares of the as-converted common stock purchased pursuant to the Investment Agreement, Blackstone will have the right to designate for nomination one director to our Board. The directors designated by Blackstone are entitled to serve on Board committees, subject to applicable law and stock exchange rules, and one of such directors must be appointed to the newly-formed committee tasked with identifying a new chief executive officer to fill the vacancy resulting from Mr. McCarvel's resignation.

Restrictions of the Holder

Pursuant to the Investment Agreement, Blackstone is subject to certain standstill restrictions which restrict Blackstone from acquiring more than 25% of our outstanding common stock until the date on which Blackstone is no longer entitled to designate any directors to the Board. In addition, subject to certain customary exceptions, Blackstone is restricted from transferring the Series A preferred stock

until the second anniversary of the Closing and, for so long as any Series A preferred stock is outstanding, may not transfer the Series A preferred stock to certain of our competitors (as defined in the Investment Agreement) or holders of 25% or more of our common stock. Blackstone also has certain preemptive rights and information rights under the Investment Agreement, which are subject to certain conditions.

Registration Rights Agreement

On January 27, 2014, we and the Blackstone Purchasers entered into a Registration Rights Agreement (the "Registration Rights Agreement"), pursuant to which we have agreed to provide to the Blackstone Purchasers certain customary demand and piggyback registration rights in respect of the shares of Series A preferred stock and any shares of common stock issued upon conversion of the Series A preferred stock. The Registration Rights Agreement contains customary terms and conditions, including certain customary indemnification obligations.