Skechers U.S.A., Inc. Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

Cash, Cash Equivalents, Short-Term And Long-Term Investments

Cash, Cash Equivalents, Short-Term And Long-Term Investments

3 Months Ended

Mar. 31, 2023

Cash Cash Equivalents And Short Term And Long Term Investments [Abstract]

Cash, Cash Equivalents, Short-Term and Long-Term Investments

(2)	Cash, Cash Equivalents, Short-term and Long-term Investments

The following tables show the Company’s cash, cash equivalents, short-term and long-term investments by significant investment category:

	As of March 31, 2023
(in thousands)	Adjusted Cost		Fair Value		Cash and Cash Equivalents		Short-Term Investments		Long-Term Investments
Cash	$	680,416	$	680,416	$	680,416	$	—	$	—
Level 1
Money market funds		73,375		73,375		73,375		—		—
U.S. Treasury securities		17,552		17,552		6,249		11,303		—
Mutual funds	N/A			5,268		—		—		5,268
Total level 1		90,927		96,195		79,624		11,303		5,268
Level 2
Corporate notes and bonds		97,425		97,425		—		76,066		21,359
Asset-backed securities		4,669		4,669		—		135		4,534
U.S. Agency securities		3,013		3,013		—		2,003		1,010
Total level 2		105,107		105,107		—		78,204		26,903
Total	$	876,450	$	881,718	$	760,040	$	89,507	$	32,171

	As of December 31, 2022
(in thousands)	Adjusted Cost		Fair Value		Cash and Cash Equivalents		Short-Term Investments		Long-Term Investments
Cash	$	539,730	$	539,730	$	539,730	$	—	$	—
Level 1
Money market funds		71,503		71,503		71,503		—		—
U.S. Treasury securities		18,201		18,201		2,000		16,201		—
Mutual funds	N/A			5,893		—		—		5,893
Total level 1		89,704		95,597		73,503		16,201		5,893
Level 2
Corporate notes and bonds		101,959		101,959		2,500		85,731		13,728
Asset-backed securities		4,641		4,641		—		234		4,407
Total level 2		106,600		106,600		2,500		85,965		18,135
Total	$	736,034	$	741,927	$	615,733	$	102,166	$	24,028

The Company’s investments consist of U.S. Treasury securities, corporate notes and bonds and asset-backed securities, which the Company has the intent and ability to hold to maturity and therefore are classified as held-to-maturity. The Company holds mutual funds in its deferred compensation plan which are classified as trading securities. The Company may sell certain of its investments prior to their stated maturities for strategic reasons including, but not limited to, anticipation of credit deterioration and duration management. The maturities of the Company’s long-term investments are less than two years. The Company minimizes the potential risk of principal loss by investing in highly-rated securities and limiting the amount of credit exposure to any one issuer. Fair values were determined for each individual security in the investment portfolio. Included in long-term investments on the Condensed Consolidated Balance Sheets are company owned life insurance contracts of $48.6 million and $46.5 million as of March 31, 2023 and December 31, 2022. Interest income was $2.6 million and $1.2 million for three months ended March 31, 2023 and 2022.

When evaluating an investment for its current expected credit losses, the Company reviews factors such as historical experience with defaults, losses, credit ratings, term and macroeconomic trends, including current conditions and forecasts to the extent they are reasonable and supportable.