Quarterly report pursuant to Section 13 or 15(d)

Non-Controlling Interests

v3.8.0.1
Non-Controlling Interests
9 Months Ended
Sep. 30, 2017
Noncontrolling Interest [Abstract]  
Non-Controlling Interests

(3)

NON-CONTROLLING INTERESTS

The Company has equity interests in several joint ventures that were established either to exclusively distribute the Company’s products primarily throughout Asia or to construct the Company’s domestic distribution facility. These joint ventures are variable interest entities (“VIEs”) under ASC 810-10-15-14. The Company’s determination of the primary beneficiary of a VIE considers all relationships between the Company and the VIE, including management agreements, governance documents and other contractual arrangements. The Company has determined for its VIEs that the Company is the primary beneficiary because it has both of the following characteristics: (a) the power to direct the activities of a VIE that most significantly impact the entity’s economic performance, and (b) the obligation to absorb losses of the entity that could potentially be significant to the VIE or the right to receive benefits from the entity that could potentially be significant to the VIE. Accordingly, the Company includes the assets and liabilities and results of operations of these entities in its condensed consolidated financial statements, even though the Company may not hold a majority equity interest. There have been no changes during 2017 in the accounting treatment or characterization of any previously identified VIE. The Company continues to reassess these relationships quarterly. The assets of these joint ventures are restricted in that they are not available for general business use outside the context of such joint ventures. The holders of the liabilities of each joint venture have no recourse to the Company. The Company does not have a variable interest in any unconsolidated VIEs.

The following VIEs are consolidated into the Company’s condensed consolidated financial statements and the carrying amounts and classification of assets and liabilities were as follows (in thousands):

 

HF Logistics-SKX, LLC

 

September 30,

2017

 

 

December 31, 2016

 

Current assets

 

$

2,426

 

 

$

2,006

 

Non-current assets

 

 

104,723

 

 

 

108,668

 

Total assets

 

$

107,149

 

 

$

110,674

 

 

 

 

 

 

 

 

 

 

Current liabilities

 

$

3,055

 

 

$

2,469

 

Non-current liabilities

 

 

66,819

 

 

 

68,168

 

Total liabilities

 

$

69,874

 

 

$

70,637

 

 

 

 

 

 

 

 

 

 

Distribution joint ventures (1)

 

September 30,

2017

 

 

December 31, 2016

 

Current assets

 

$

403,797

 

 

$

289,227

 

Non-current assets

 

 

83,834

 

 

 

49,229

 

Total assets

 

$

487,631

 

 

$

338,456

 

 

 

 

 

 

 

 

 

 

Current liabilities

 

$

202,178

 

 

$

132,518

 

Non-current liabilities

 

 

7,925

 

 

 

2,214

 

Total liabilities

 

$

210,103

 

 

$

134,732

 

 

(1)

Distribution joint ventures include Skechers Footwear Ltd. (Israel), Skechers China Limited, Skechers Korea Limited, Skechers Southeast Asia Limited, Skechers (Thailand) Limited, Skechers Retail India Private Limited, and Skechers South Asia Private Limited.

The following is a summary of net earnings attributable to, distributions to and contributions from non-controlling interests (in thousands):

 

 

 

Three Months Ended

September 30,

 

 

Nine Months Ended

September 30,

 

 

 

2017

 

 

2016

 

 

2017

 

 

2016

 

Net earnings attributable to non-controlling

   interests

 

$

14,520

 

 

$

11,432

 

 

$

41,025

 

 

$

33,361

 

Distributions to:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

HF Logistics-SKX, LLC

 

 

1,048

 

 

 

1,015

 

 

 

3,091

 

 

 

3,131

 

Skechers China Limited

 

 

 

 

 

 

 

 

4,710

 

 

 

3,083

 

Skechers Southeast Asia Limited

 

 

1,347

 

 

 

1,280

 

 

 

1,347

 

 

 

1,280

 

Skechers Hong Kong Limited

 

 

199

 

 

 

451

 

 

 

199

 

 

 

451

 

Contributions from:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

India distribution joint ventures

 

 

 

 

 

38

 

 

 

 

 

 

2,943

 

Skechers Footwear Ltd. (Israel)

 

 

 

 

 

2,764

 

 

 

46

 

 

 

2,764