#1Cr CS cr OCS CI OC crocs™ Q3 2022 Investor Presentation November 2022 ww *** love R ##2cr CS cr OCS CI OC FORWARD-LOOKING STATEMENT This document includes estimates, projections, and statements relating to our plans, commitments, objectives, and expectations that are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements include, but are not limited to, statements regarding potential impacts to our business related to our supply chain challenges, cost inflation, the COVID-19 pandemic, our financial condition, brand and liquidity outlook, and expectations regarding our future revenue, margins, non-GAAP adjustments, tax rate, earnings per share, gross leverage, and capital expenditures, the acquisition of HEYDUDE and benefits thereof, Crocs' strategy, plans, objectives, expectations (financial or otherwise) and intentions, future financial results and growth potential, including our plans for international growth, statements regarding full year, fourth quarter 2022, and long term financial outlook and future profitability, cash flows, and brand strength, market share, anticipated product portfolio and our ability to deliver sustained, highly profitable growth and create significant shareholder value. These statements involve known and unknown risks, uncertainties, and other factors, which may cause our actual results, performance, or achievements to be materially different from any future results, performances, or achievements expressed or implied by the forward-looking statements. These risks and uncertainties include, but are not limited to, the following: our expectations regarding supply chain disruptions; the COVID-19 pandemic and related government, private sector, and individual consumer responsive actions; cost inflation; current global financial conditions, including economic impacts resulting from the COVID-19 pandemic; the effect of competition in our industry; our ability to effectively manage our future growth or declines in revenues; changing consumer preferences; our ability to maintain and expand revenues and gross margin; our ability to accurately forecast consumer demand for our products; our ability to successfully implement our strategic plans; our ability to develop and sell new products; our ability to obtain and protect intellectual property rights; the effect of potential adverse currency exchange rate fluctuations and other international operating risks; and other factors described in our most recent Annual Report on Form 10-K under the heading "Risk Factors" and our subsequent filings with the Securities and Exchange Commission. Readers are encouraged to review that section and all other disclosures appearing in our filings with the Securities and Exchange Commission. All information in this document speaks as of November 3, 2022. We do not undertake any obligation to update publicly any forward- looking statements, whether as a result of the receipt of new information, future events, or otherwise, except as required by applicable law. 2#3cr CS cr OCS CI OC C FORS POKETER CONTENTS O O O BUSINESS & FINANCIAL HIGHLIGHTS BRAND PERFORMANCE FINANCIAL OUTLOOK APPENDIX 3#4cr CS cr OCS CI OC C OUR VISION Everyone Comfortable In Their Own Shoes#5cr CS cr OCS CI OC OUR VALUES THE PATH WE CHOOSE TO WALK DELIGHTFULLY DEMOCRATIC We celebrate one-of-a-kinds and stand together with all different kinds. IMAGINATIVE INNOVATION We stretch the possibilities of design and creative thinking so you can reach your highest potential. PEOPLE-PURPOSED DESIGN We think people-first at every step. We design for everything you do and everywhere you go. UNAPOLOGETIC OPTIMISM We make a choice every day to have an open mind and look on the bright and colorful side. INHERENT SIMPLICITY We know smart doesn't have to mean complicated. So we keep things simple, light, and totally intuitive. CONFIDENTLY COMFORTABLE We support comfort on every level, because when you're comfortable, you can do anything. LO#6Cr CS cr OCS CI OC OUR STORY CROCS IS A PROVEN GROWTH COMPANY Entrepreneurial Phase 2002 - 2006 ● Classic clog is born in 2002 and gains broad popularity Completed largest footwear IPO in U.S. history in 2006 Acquired Jibbitz, increasing personalization ● Overextension 2008 to 2013 Over diversified product line (e.g., golf shoes) and little investment in the iconic clog led to low brand relevance and subpar gross margins Disparate go to market created many subscale geographies Over extension of global retail fleet to 600+ stores in 2013 No cohesive global marketing strategy High cost base (SG&A 47%+ of revenues) ● Announced intention to refine strategy and earnings growth through simplification and focus Appointed Andrew Rees as President Blackstone invested $200M to fund share repurchase O O Under Rees' leadership, transformed the Crocs brand: Consumer-centric brand strategy to drive relevance Implemented global brand playbook O O O O Iconic, focused product offering Re-ignited iconic clog Focused on clogs, sandals and Jibbitz O O Transformation & Brand Re-ignition 2014 to 2017 Improved gross margin 50% SKU reduction Continued shift to molded product O O Shifted to digital-only marketing for scale Leveraged influencers and partnerships Flexible SG&A base Cut $80M in fixed expenses, reinvesting a portion back into marketing O O Reduced store count from 600+ to <400, and focused on profitable outlets Transitioned sub-scale direct markets to distributors Closed owned manufacturing facilities Profitable Growth 2018 to Present 2018 begins a 4+ year run of double- digit revenue growth, with finishing 2021 with record revenues of $2.3B Achieved double-digit operating margin target in 2019 and expanded margin to 30% in 2021 Repurchased -$1.7B of shares from 2014 at average price of $37.90 per share Outlined growth strategy including Crocs Brand $5B revenue target by 2026 and 26%+ long-term operating margin Announced commitment to net zero carbon emissions by 2030 Acquired casual footwear brand HEYDUDE and announced $1B+ revenue target for brand HEY DUDE GOOD TO GO-TO™ (O#7cr CS cr JOUSTOU C OC ARAI BUSINESS & FINANCIAL HIGHLIGHTS#8Cr CS cr OCS CI OC BUSINESS & FINANCIAL HIGHLIGHTS Our exceptional third quarter results, including record revenue and industry-leading adjusted operating margin of 28%, are a testament to the strength of the Crocs and HEYDUDE brands. We are raising 2022 guidance following our strong back-to-school performance and 20% constant currency revenue growth in the Crocs Brand. We are confident in our ability to continue to gain significant market share, deliver best-in-class profitability, and generate strong cash flow." - Andrew Rees, CEO ∞#9cr CS cr OCS CI OC C BUSINESS & FINANCIAL HIGHLIGHTS Q3 2022 REVENUE GROWTH SUMMARY $985M Crocs, Inc. +57% / 63% CC(1) +22% Crocs Brand Digital Sales CC Growth (1) $716M Crocs Brand +14% / 20% CC (1) +18% Crocs Brand DTC Comp Growth (³) 1. Revenue growth on a constant currency basis, which is a Non-GAAP Financial Measure. See further details in Appendix. 2. Digital sales include Crocs.com, heydude.com, third-party market places (e.g. Tmall), and e-tailers (e.g. Amazon, Zappos, Zalando). See further details in Appendix for DTC comparable sales definition. 3. $269M HEYDUDE Brand +87% 37% Digital Penetration (²) (O#10Cr CS cr OCS CI OC BUSINESS & FINANCIAL HIGHLIGHTS Q3 REVENUE BREAKDOWN 1. 2. Geography (¹) EMEALA 19% HEYDUDE 27% Asia Pacific 19% Brand O Crocs 73% North America 62% Other Casual 46% Digital Penetration (2) O Product Penetration O O Geography is for Crocs Brand only. Digital sales include Crocs.com, heydude.com, third-party market places (e.g. Tmall), and e-tailers (e.g. Amazon, Zappos, Zalando). Clogs 54% Digital 37% WHL 54% Channel DTC 46% 10#11Cr CS cr OCS CI OC BUSINESS & FINANCIAL HIGHLIGHTS Q3 2022 FINANCIAL HIGHLIGHTS Revenues ($M) Gross Margin Adjusted Gross Margin(²) Adjusted SG&A as % of Revenue(2) Operating Margin Adjusted Operating Margin(2) Diluted EPS Adjusted Diluted EPS (2) 1. Revenue growth on a constant currency basis, which is a Non-GAAP Financial Measure. See further details in Appendix. 2. See reconciliation to GAAP equivalents in Appendix. Q3 $985 54.9% 55.1% 27.2% 26.8% 27.9% $2.72 $2.97 B/(W) vs. PY +63% (1) (890) bp (910) bp 420 bp (560) bp (490) bp +12% +20% 11#12cr CS cr JOUSTOU C OC ARAI BRAND PERFORMANCE de 929 12#13Cr CS cr OCS CI OC Cl BRAND PERFORMANCE CROCS BRAND Q3 HIGHLIGHTS ● ● ● ● Revenues +20% CC vs. PY North America DTC comparable sales +13% • EMEALA +46% CC vs. PY O O Asia Pacific +82% CC vs. PY Christian Cowan collaboration with clogs featured in NY fashion week Crocs rose to #5 preferred footwear brand for teens, up from #6, in Piper Sandler's Fall 2022 Taking Stock with Teens Survey 1. 2. O Adj. Gross Margin decreased 670 bp driven by ~200 bp of inflationary costs and ~270 bp of higher freight and inventory handling costs of which we estimate 150 bp to be transitory. Currency impacted gross margin by 115 basis points Revenues Adj. Gross Margin(2) Adj. SG&A as % of Revenue (2) Adj. Operating Margin(2) Q3'2022 $716M 57.5% 24.4% 33.1% B/(W) vs. PY +19.9% (1) (670) bp (20) bp (690) bp Revenue growth on a constant currency basis, which is a Non-GAAP Financial Measure. See further details in Appendix. See reconciliation to GAAP equivalents in Appendix. E C 7-ELEVEN HAVER SALEHE BEMBURY. P CS CS Cr crocs crocs cr crocs crocs crocs crocs C crocs crocs croc rocs crocs crocs c ocs crocs crocs deoc Grocs crocs#14Cr CS cr OCS CI OC BRAND PERFORMANCE CROCS BRAND Q3 REVENUE GROWTH Geography Channel +2% North America +22% Digital Sales CC Growth (1,2) +66% / 82% CC(1) +26% / 46% CC (1) Asia Pacific +18% DTC Comparable Growth (3) 1. Revenue growth on a constant currency basis, which is a Non-GAAP Financial Measure. See further details in Appendix. 2. Digital sales include Crocs.com, heydude.com, third-party market places (e.g. Tmall), and e-tailers (e.g. Amazon, Zappos, Zalando). See further details in Appendix for DTC comparable sales definition. 3. EMEALA +22% Wholesale CC Growth(1) CS CS C crocs ocs cr crocs crocs crocs C crocs crocs croc rocs crocs crocs c ocs crocs crocs doc Grocs crocs#15Cr CS cr OCS CI OC Cl BRAND PERFORMANCE CROCS BRAND Q3 REVENUE BREAKDOWN Geography EMEALA 19% Asia Pacific 19% North America 62% Digital Penetration (¹1) O Digital 37% 1. Digital sales include Crocs.com, third-party market places (e.g. Tmall), and e-tailers (e.g. Amazon, Zappos, Zalando) WHL 49% Channel DTC 51% CS CS C s crocs crocs cr crocs crocs crocs crocs C crocs crocs croc rocs crocs crocs c ocs crocs crocs deoc Grocs crocs#16Cr CS cr OCS CI OC Cl BRAND PERFORMANCE BUILDING CROCS BRAND TO $5B+ BY 2026E PLANNED GROWTH INITIATIVES ● ● ● ● Invest in digital to be 50%+ of long-term Crocs Brand revenues or $2.5B+ Grow Sandals revenues by 4x to $1.2B+(1) Double Jibbitz revenues(1) Increase Asia Pacific region to become ~25% of long-term Crocs Brand revenues Grow China from <5% of Crocs Brand revenues to ~10% Continue to deliver innovative product & marketing 1. As compared to LTM Q2 2021 CS CS C s crocs crocs cr crocs crocs crocs crocs C crocs crocs croc rocs crocs crocs c ocs crocs crocs deoc Grocs crocs#17BRAND PERFORMANCE HEYDUDE BRAND Q3 HIGHLIGHTS Q3 Revenues of $269M exceeded previous guidance Revenue growth of +87% vs PY • Brand marketing launch drove higher traffic and contributed to DTC revenues of $88M ● ● ● ● O HEYDUDE rose to #7 preferred footwear brand for teens, up from #8, in Piper Sandler's Fall 2022 Taking Stock with Teens Survey Brand began rollout of influencer strategy with a portfolio of partners Continuing to expand wearing occasions with sneaker silhouettes and the introduction of new colors & prints; continuing to elevate the product with fur linings Revenue Adj. Gross Margin(1) SG&A as % of Revenue(2) Adj. Operating Margin(¹) Q3'2022 $269M 48.8% 19.4% 29.3% 1. See reconciliation to GAAP equivalents in Appendix 2. Non-GAAP SG&A adjustments were not made within the HEYDUDE brand 17#18BRAND PERFORMANCE MAXIMIZING HEYDUDE GROWTH PLANNED GROWTH INITIATIVES Invest in industry-leading marketing to build brand awareness Enhance digital capabilities to further accelerate digital Leverage Crocs strong wholesale relationships to enhance distribution Leverage Crocs distribution for global growth Invest to scale supply chain and gain efficiencies Test selective retail footprint for enhanced brand awareness ● ● ● ● 18#19cr CS cr JOUSTOU C OC ARAI FINANCIAL OUTLOOK idle 920 19#20cr CS cr OCS CI OC FINANCIAL OUTLOOK 2022E GUIDANCE (numbers on reported basis, unless otherwise noted) Total Revenues crocs™ HEY DUDE GOOD TO GO-TO Adjusted Operating Margin(3) Adjusted Operating Income (³) Adjusted One Time Costs (3) Adjusted Tax Rate(³) Adjusted Diluted EPS(3) Capital Expenditures FY 2022E $3.455 to $3.520B $2.605 to $2.630B +17% CC(1) $850 to $890M(2) -27% (4,5) -$920 to $950M(4,5) -$130M(5) ~21% $9.95 to $10.30 $150 to $170M (1) 1. Crocs Brand expected revenue growth for FY 2022E of approximately 17% on a constant currency basis implies approximately 13% growth on a reported basis and expected revenues of $2.605 to $2.630B 2. Including the period of time prior to the closing of the acquisition, HEYDUDE 2022E revenues expected to be approximately $940 to $980M. 3. See reconciliation to GAAP equivalents in Appendix. 4. Includes an incremental $67M of air freight embedded in gross margin for full year 2022. 5. Non-GAAP adjustments include an expected: $55M in SG&A costs, primarily associated with the HEYDUDE acquisition, and an additional $75M of non-cash costs in cost of sales, primarily related to the write up of HEYDUDE inventory costs to fair market value at the close of acquisition for full year 2022. 20#21cr CS cr OCS CI OC FINANCIAL OUTLOOK LONG TERM PROJECTIONS* crocs We expect by 2026: Revenues: $5B+ ● Adjusted Operating Margin: 26%+ Non-GAAP Tax Rate: ~25% Capital Expenditures: ~3% of Revenues HEY DUDE GOOD TO GO-TO Initial expectation of achieving Revenues of $1B by 2024 Now expect Revenues to be over $1B in 2023 Adjusted Operating Margin: 26%+ Long-term guidance to be provided at a future date Consolidated adjusted operating margins to still exceed 26% by 2026 * Crocs Brand long-term guidance provided here is on a pre-acquisition standalone basis. Long term for Crocs Brand and Crocs, Inc. defined as 2026E and for HEYDUDE defined as 2024E. Please refer to Appendix for definitions and Non-GAAP reconciliations. 21#22Cr CS cr OCS CI OC FINANCIAL OUTLOOK CAPITAL ALLOCATION PRIORITIES Business Investment Invest to support long-term, profitable growth Deleverage to <2.0x Gross Leverage Committed to working towards deleveraging quickly Shareholder Returns Share repurchases on hold until gross leverage is <2.0x, which we expect to occur by mid-2023 22#23Cr CS cr OCS CI OC FINANCIAL OUTLOOK DELEVERAGING REMAINS ON TRACK O Committed to quickly deleveraging and targeting to be below 2.0x gross leverage by mid-year 2023 • Share repurchases on O hold until gross leverage is <2.0x, which we expect to occur by mid-2023 Net Debt/Adj. EBITDA(2) Gross Debt / Adjusted EBITDA Outlook (1) 1.1x 0.8x YE 2021 3.1x 2.9x PF YE 2021 for HEYDUDE 2.5x 2.4x PF Q3 2022 1. Assumes excess free cash flow used to repay borrowings. Gross Debt / Adjusted EBITDA calculated as: Total Gross Debt / Trailing Twelve Months ("TTM") Adjusted EBITDA. Adjusted EBITDA calculated as Adjusted Operating Income plus depreciation and amortization. Please refer to Appendix for definition and Non-GAAP reconciliation. a. b. Pro forma ("PF") includes HEYDUDE for the period prior to acquisition close (assuming the acquisition had closed on the first day of such trailing twelve month period). 2. Net Debt / Adjusted EBITDA calculated as: (Total Gross Debt - Cash and Cash Equivalents) / TTM Adjusted EBITDA, as calculated above. ≤ 2.0x Mid-Year 2023E 23#24cr CS cr JOUSTOU C OC ARAI APPENDIX Rade 929 24#25Cr CS cr OCS CI OC APPENDIX NON-GAAP RECONCILIATION In addition to financial measures presented on the basis of accounting principles generally accepted in the United States of America ("GAAP"), we present "Non-GAAP cost of sales," "Non- GAAP gross profit," "Non-GAAP gross margin," "Non-GAAP gross margin by brand," "Non-GAAP selling, general, and administrative expenses," "Non-GAAP selling, general and administrative expenses as a percent of revenues," "Non-GAAP income from operations," "Non-GAAP operating margin," "Non-GAAP income tax expense (benefit)," "Non-GAAP effective tax rate," "Non-GAAP net income," and "Non-GAAP basic and diluted net income per common share," which are non-GAAP financial measures. We also present future period guidance for "Non- GAAP operating margin," "Non-GAAP operating income," "Non-GAAP effective tax rate," and "Non-GAAP diluted earnings per share." Non-GAAP results 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 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 GAAP. Constant currency represents current period results that have been retranslated using exchange rates used in the prior year comparative period to enhance the visibility of the underlying business trends excluding the impact of foreign currency exchange rate fluctuations. Management uses non-GAAP results to assist in comparing business trends from period to period on a consistent basis in communications with the board of directors, stockholders, analysts, and investors concerning our financial performance. We believe that these non-GAAP measures are useful to investors and other users of our condensed consolidated financial statements as an additional tool for evaluating operating performance and trends. For the three and nine months ended September 30, 2022, management believes it is helpful to evaluate our results excluding the impacts of various adjustments relating to special or non-recurring items. Investors should not consider these non-GAAP measures in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. Comparable store status, as included in the DTC comparable sales figures, is determined on a monthly basis. Comparable store sales include the revenues of stores that have been in operation for more than twelve months. 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 and in the same month in the following year. Location closures in excess of three months are excluded until the thirteenth month post re-opening. E-commerce comparable revenues are based on same site sales period over period. E-commerce sites that are temporarily offline or unable to transact or fulfill orders ("site disruption") are excluded from the comparable sales calculation during the month of site disruption and in the same month in the following year. E-commerce site disruptions in excess of three months are excluded until the thirteenth month after the site has re- opened. 25#26cr CS cr OCS CI OC C APPENDIX NON-GAAP RECONCILIATION (CONT'D) Non-GAAP Cost of Sales, Gross Profit, and Gross Margin Reconciliation: Three Months Ended September 30, 2022 Nine Months Ended September 30, 2022 2021 2021 GAAP revenues GAAP cost of sales Distribution centers (1) HEYDUDE inventory fair value step-up (2) Inventory reserve in Russia (3) Total adjustments Non-GAAP cost of sales GAAP gross profit GAAP gross margin Non-GAAP gross profit Non-GAAP gross margin SA GA 985,094 $ 443,792 (2,316) 12 1,025 (1,279) 442,513 $ 541,302 54.9 % 542,581 55.1 % (in thousands) 625,919 $ 226,123 (2,031) (2,031) 224,092 399,796 63.9 % 401,827 64.2% $ 2,609,823 $ 1,245,864 (4,896) (62,238) (200) (67,334) 1,178,530 $ 1,363,959 $ 52.3% 1,431,293 54.8% 1,726,790 678,594 (4,131) (4,131) 674,463 1,048, 196 60.7 % 1,052,327 60.9 % (1) Represents expenses, including expansion costs and duplicate rent costs, related to our distribution centers in Dayton, Ohio and Dordrecht, the Netherlands. (2) Primarily represents a step-up of HEYDUDE inventory costs to fair value upon the close of the acquisition on February 17, 2022. (3) Represents the net impact of an inventory reserve expense in our EMEALA segment associated with the continued shutdown of our direct operations in Russia. 26#27Cr CS cr OCS CI OC APPENDIX NON-GAAP RECONCILIATION (CONT'D) Non-GAAP selling, general and administrative expenses and selling, general and administrative expenses as a percent of revenues reconciliation: GAAP revenues GAAP selling, general and administrative expenses HEYDUDE acquisition-related costs (1) Impact of shutdown of Russia direct operations (2) Other (3) Total adjustments Non-GAAP selling, general and administrative expenses (4) GAAP selling, general and administrative expenses as a percent of revenues Non-GAAP selling, general and administrative expenses as a percent of revenues $ Three Months Ended September 30, 2022 2021 985,094 277,239 (6,863) 40 (2,300) (9,123) 268,116 $ 28.1 % 27.2% (in thousands) 625,919 196,728 196,728 Nine Months Ended September 30, 2022 2021 31.4% 31.4% 2,609,823 733,255 (33,205) (5,797) (3,502) (42,504) 690,751 $ 28.1 % 26.5 % (1) Represents costs related to the acquisition and integration of HEYDUDE, including legal, professional, consulting, and transaction fees. (2) Represents various costs associated with the continued shutdown of our direct operations in Russia, including severance and lease exit costs and penalties. (3) Primarily represents duplicate rent costs associated with our upcoming move to a new headquarters. (4) Non-GAAP selling, general and administrative expenses are presented gross of tax. 1,726,790 525, 120 525, 120 30.4 % 30.4 % 27#28Cr CS cr CI OC APPENDIX NON-GAAP RECONCILIATION (CONT'D) Non-GAAP Income from Operations and Operating Margin Reconciliation: Three Months Ended September 30, 2022 2021 GAAP revenues GAAP income from operations Non-GAAP cost of sales adjustments (1) Non-GAAP selling, general and administrative expenses adjustments (2) Non-GAAP income from operations GAAP operating margin Non-GAAP operating margin 985,094 264,063 1,279 9,123 274,465 $ 26.8 % 27.9 % (in thousands) 625,919 $ 203,068 2,031 205,099 32.4% 32.8 % Nine Months Ended September 30, 2022 2021 $ 2,609,823 630,704 67,334 42,504 740,542 24.2% 28.4 % $ 1,726,790 523,076 4,131 527,207 30.3 % 30.5 % (1) See 'Non-GAAP cost of sales, gross profit, and gross margin reconciliation' above for more details. (2) See 'Non-GAAP selling, general and administrative expenses and selling, general and administrative expenses as a percent of revenues reconciliation' above for more details. 28#29cr CS cr OCS CI OC C APPENDIX NON-GAAP RECONCILIATION (CONT'D) Non-GAAP Income Tax Expense (Benefit) and Effective Tax Rate Reconciliation: Three Months Ended September 30, 2021 Nine Months Ended September 30, 2022 2021 GAAP income from operations GAAP income before income taxes Non-GAAP income from operations (1) GAAP non-operating income (expenses): Foreign currency gains (losses), net Interest income Interest expense Other income (expense), net Non-GAAP income before income taxes $ GAAP income tax expense Tax effect of non-GAAP operating adjustments Impact of intra-entity IP transfers (2) Non-GAAP income tax expense GAAP effective income tax rate Non-GAAP effective income tax rate $ 2022 264,063 229,575 274,465 (393) 31 (34,142) 16 239,977 60,226 2,751 (8,368) 54,609 26.2% 22.8 % $ (in thousands) 203,068 $ 197,736 205,099 537 615 (6,486) 2 199,767 44,247 508 (1,556) 43,199 22.4 % 21.6% $ $ 630,704 542,939 740,542 (1,115) 219 (86,357) (512) 652,777 140,515 18,789 (18,274) 141,030 25.9 % 21.6 % $ $ 523,076 510,890 527,207 (84) 713 (12,830) 15 515,021 (59,951) 1,038 173,503 114,590 (11.7)% 22.2 % (1) See 'Non-GAAP income from operations and operating margin reconciliation' above for more details. (2) In the fourth quarter of 2020, and subsequently in the fourth quarter of 2021, we made changes to our international legal structure, including an intra-entity transfer of certain intellectual property rights, primarily to align with current and future international operations. The transfers resulted in a step-up in the tax basis of intellectual property rights and correlated increases in foreign deferred tax assets based on the fair value of the transferred intellectual property rights. This adjustment represents the current period impact of these transfers. The prior year adjustment also includes the release of the valuation allowance as a result of a tax law change. 29#30cr CS cr OCS CI OC APPENDIX NON-GAAP RECONCILIATION (CONT'D) Non-GAAP Earnings Per Share Reconciliation: Numerator: GAAP net income Non-GAAP cost of sales adjustments (1) Non-GAAP selling, general and administrative expenses adjustments (2) Tax effect of non-GAAP adjustments Non-GAAP net income Denominator: GAAP weighted average common shares outstanding - basic Plus: GAAP dilutive effect of stock options and unvested restricted stock units GAAP weighted average common shares outstanding - diluted GAAP net income per common share: Basic Diluted Non-GAAP net income per common share: Basic Diluted $ Three Months Ended September 30, 2022 2021 169,349 $ 1,279 9,123 5,617 185,368 $ 61,693 674 62,367 2.75 2.72 $ 3.00 2.97 SALA $ (in thousands, except per share data) 153,489 $ 2,031 1,048 156,568 62,033 1,291 63,324 $ $ 2.47 2.42 $ Nine Months Ended September 30, 2022 2021 2.52 $ 2.47 $ 402,424 $ 67,334 42,504 (515) 511,747 61,042 798 61,840 6.59 6.51 $ 8.38 $ 8.28 $ 570,841 4,131 (174,541) 400,431 (1) See 'Non-GAAP cost of sales, gross profit, and gross margin reconciliation' above for more information. (2) See 'Non-GAAP selling, general and administrative expenses and selling, general and administrative expenses as a percent of revenues reconciliation' above for more information. 63,695 1,242 64,937 8.96 8.79 6.29 6.17 30#31cr CS cr OCS CI OC APPENDIX NON-GAAP RECONCILIATION (CONT'D) Reconciliation of GAAP to Non-GAAP Financial Guidance: Full Year 2022: Non-GAAP operating margin and operating income reconciliation: GAAP operating margin and operating income Non-GAAP adjustments, primarily associated with the HEYDUDE acquisition (1) Non-GAAP operating margin and operating income Non-GAAP effective tax rate reconciliation: GAAP effective tax rate Non-GAAP adjustments associated with amortization of intellectual property (2) Non-GAAP effective tax rate Non-GAAP diluted earnings per share reconciliation: GAAP diluted earnings per share Non-GAAP adjustments, primarily associated with the HEYDUDE acquisition and amortization of intellectual property (1)(2) Non-GAAP diluted earnings per share Approximately: ($ in millions, except per share data) 23% 4% 27% 25% (4)% 21% $7.95 to $8.30 $2.00 $9.95 to $10.30 $790 to $820 $130 $920 to $950 (1) For the full year 2022, we expect to incur $55 million in SG&A costs, primarily associated with the HEYDUDE acquisition and integration, and a total $75 million in cost of sales, primarily related to the write up of HEYDUDE inventory costs to fair market value at the close of acquisition. (2) In the fourth quarter of 2020, and subsequently in the fourth quarter of 2021, we made changes to our international legal structure, including an intra-entity transfer of certain intellectual property rights, primarily to align with current and future international operations. This adjustment represents the amortization of the deferred tax asset related to these intellectual property rights in this period and the tax impact of cost of sales and SG&A non-GAAP adjustments. Our long-term guidance for "Consolidated adjusted operating margin" is a non-GAAP financial measure that excludes or otherwise has been adjusted for special items from our U.S. GAAP financial statements. We consider these items to be necessary adjustments for purposes of evaluating our ongoing business performance and are often considered non-recurring. Such adjustments are subjective and involve significant management judgment. We are unable to reconcile expected long-term consolidated adjusted operating margin to its nearest U.S. GAAP measure without unreasonable efforts because we are unable to predict with a reasonable degree of certainty the actual impact of the special and other non-core items. By their very nature, special and other non-core items are difficult to anticipate with precision because they are generally associated with unexpected and unplanned events that impact our company and its financial results. Therefore, we are unable to provide a reconciliation of these measures. 31#32Cr CS cr CS CI OC C APPENDIX NON-GAAP RECONCILIATION (CONT'D) Non-GAAP Gross Margin Reconciliation by Brand: GAAP Crocs Brand gross margin Non-GAAP adjustments: Distribution centers (1) Inventory reserve in Russia (2) Non-GAAP Crocs Brand gross margin Three Months Ended September 30, 2022 2021 57.3 % 0.3% (0.1)% 57.5 % 63.9 % 0.3 % - % 64.2 % (1) Represents expenses, including expansion costs and duplicate rent costs, related to our distribution centers in Dayton, Ohio and Dordrecht, the Netherlands. (2) Represents the net impact of an inventory reserve expense in our EMEALA segment associated with the continued shutdown of our direct operations in Russia. 32#33Cr CS cr CS CI OC C APPENDIX NON-GAAP RECONCILIATION (CONT'D) Non-GAAP Selling, General and Administrative Expenses Reconciliation by Brand: GAAP Crocs Brand selling, general and administrative expenses as a percent of revenues Non-GAAP adjustments: Impact of shutdown of Russia direct operations (1) Non-GAAP Crocs Brand selling, general and administrative expenses as a percent of revenues Three Months Ended September 30, 2021 2022 24.4 % % 24.4 % 24.2 % % 24.2 % (1) Represents various costs associated with the continued shutdown of our direct operations in Russia, including severance and lease exit costs and penalties. 33#34Cr CS cr OCS CI OC APPENDIX NON-GAAP RECONCILIATION (CONT'D) Non-GAAP Income from Operations and Operating Margin Reconciliation by Brand: GAAP Crocs Brand operating margin Non-GAAP cost of sales adjustments (1) Non-GAAP selling, general and administrative expenses adjustments (2) Non-GAAP Crocs Brand operating margin Three Months Ended September 30, 2022 2021 32.9 % 0.2 % - % 33.1 % 39.7 % 0.3% % 40.0 % - (1) See 'Non-GAAP cost of sales, gross profit, and gross margin reconciliation' above for more information. (2) See 'Non-GAAP selling, general and administrative expenses and selling, general and administrative expenses as a percent of revenues reconciliation' above for more information. 34