Under Armour, Inc. [UAA] Filings

10-Q 1 ua-20230930.htm 10-Q ua-20230930

Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

______________________________________

Form 10-Q

______________________________________

(Mark One)


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

For the quarterly period ended September 30, 2023


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

For the transition period from to

Commission File No. 001-33202

______________________________________

UNDER ARMOUR, INC.

(Exact name of registrant as specified in its charter)

______________________________________


Maryland						52-1990078
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)
1020 Hull Street Baltimore, Maryland 21230						(410) 468-2512
(Address of principal executive offices) (Zip Code)						(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Class A Common Stock	UAA	New York Stock Exchange
Class C Common Stock	UA	New York Stock Exchange
(Title of each class)	(Trading Symbols)	(Name of each exchange on which registered)

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 ☑ No ☐

Indicate by check mark whether the registrant has submitted electronically 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 such files). Yes ☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☑

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

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

As of October 31, 2023 there were 188,786,069 shares of Class A Common Stock, 34,450,000 shares of Class B Convertible Common Stock and 214,917,103 shares of Class C Common Stock outstanding.

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UNDER ARMOUR, INC.

QUARTERLY REPORT ON FORM 10-Q

TABLE OF CONTENTS


PART I - FINANCIAL INFORMATION
Item 1.	Financial Statements:	1
	Condensed Consolidated Balance Sheets as of September 30, 2023 (unaudited) and March 31, 2023	1
	Condensed Consolidated Statements of Operations for the Three and Six Months Ended Septem ber 30, 2023 and 2022 (unaudited)	2
	Condensed Consolidated Statements of Comprehensive Income (Loss) for the Three and Six Months Ended S e ptember 30, 2023 and 2022 (unaudited)	3
	Condensed Consolidated Statements of Stockholders' Equity for the Three and Six Months Ended September 30, 2023 and 2022 (unaudited)	4
	Condensed Consolidated Statements of Cash Flows for the Six Months Ended September 30, 2023 and 2022 (unaudited)	6
	Notes to the Condensed Consolidated Financial Statements (unaudited)	7
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	27
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	42
Item 4.	Controls and Procedures	42
PART II - OTHER INFORMATION
Item 1.	Legal Proceedings	43
Item 1A.	Risk Factors	43
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	43
Item 5.	Other Information	43
Item 6.	Exhibits	43
SIGNATURES		45

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PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

Under Armour, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

(Unaudited; In thousands, except share data)


	September 30, 2023		March 31, 2023
Assets
Current assets
Cash and cash equivalents	$	655,866	$	711,910
Accounts receivable, net (Note 3)	805,197		759,860
Inventories	1,143,872		1,190,253
Prepaid expenses and other current assets, net	266,825		297,563
Total current assets	2,871,760		2,959,586
Property and equipment, net (Note 4)	687,804		672,736
Operating lease right-of-use assets (Note 5)	449,210		489,306
Goodwill (Note 6)	474,443		481,992
Intangible assets, net (Note 7)	8,129		8,940
Deferred income taxes (Note 17)	196,932		186,167
Other long-term assets	58,275		58,356
Total assets	$	4,746,553	$	4,857,083
Liabilities and Stockholders' Equity
Current liabilities
Current maturities of long-term debt (Note 9)	$	80,919	$	—
Accounts payable	542,309		649,116
Accrued expenses	312,494		354,643
Customer refund liabilities (Note 12)	149,451		160,533
Operating lease liabilities (Note 5)	138,610		140,990
Other current liabilities	59,321		51,609
Total current liabilities	1,283,104		1,356,891
Long-term debt, net of current maturities (Note 9)	594,655		674,478
Operating lease liabilities, non-current (Note 5)	657,551		705,713
Other long-term liabilities	121,501		121,598
Total liabilities	2,656,811		2,858,680
Stockholders' equity (Note 11)
Class A Common Stock, $0.0003 1/3 par value; 400,000,000 shares authorized as of September 30, 2023 and March 31, 2023; 188,724,643 shares issued and outstanding as of September 30, 2023 (March 31, 2023: 188,704,689)	63		63
Class B Convertible Common Stock, $0.0003 1/3 par value; 34,450,000 shares authorized, issued and outstanding as of September 30, 2023 and March 31, 2023	11		11
Class C Common Stock, $0.0003 1/3 par value; 400,000,000 shares authorized as of September 30, 2023 and March 31, 2023; 214,688,628 shares issued and outstanding as of September 30, 2023 (March 31, 2023: 221,346,517)	71		73
Additional paid-in capital	1,162,548		1,136,536
Retained earnings	994,110		929,562
Accumulated other comprehensive income (loss)	(67,061)		(67,842)
Total stockholders' equity	2,089,742		1,998,403
Total liabilities and stockholders' equity	$	4,746,553	$	4,857,083

Commitments and Contingencies (Note 10)

See accompanying notes.

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Under Armour, Inc. and Subsidiaries

Condensed Consolidated Statements of Operations

(Unaudited; In thousands, except per share amounts)


	Three Months Ended September 30,				Six Months Ended September 30,
	2023		2022		2023		2022
Net revenues	$	1,566,710	$	1,573,885	$	2,883,722	$	2,922,942
Cost of goods sold	814,715		860,051		1,523,991		1,578,911
Gross profit	751,995		713,834		1,359,731		1,344,031
Selling, general and administrative expenses	606,236		594,424		1,193,042		1,190,138
Income (loss) from operations	145,759		119,410		166,689		153,893
Interest income (expense), net	(373)		(3,555)		(1,999)		(9,560)
Other income (expense), net	(6,429)		(5,771)		(12,814)		(20,012)
Income (loss) before income taxes	138,957		110,084		151,876		124,321
Income tax expense (benefit)	29,494		22,251		33,465		27,908
Income (loss) from equity method investments	151		(908)		(248)		(1,806)
Net income (loss)	$	109,614	$	86,925	$	118,163	$	94,607

Basic net income (loss) per share of Class A, B and C common stock (Note 18)	$	0.25	$	0.19	$	0.27	$	0.21
Diluted net income (loss) per share of Class A, B and C common stock (Note 18)	$	0.24	$	0.19	$	0.26	$	0.20

Weighted average common shares outstanding Class A, B and C common stock
Basic	443,525		454,322		444,195		456,357
Diluted	453,715		464,141		454,107		466,143

See accompanying notes.

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Under Armour, Inc. and Subsidiaries

Condensed Consolidated Statements of Comprehensive Income (Loss)

(Unaudited; In thousands)


	Three Months Ended September 30,				Six Months Ended September 30,
	2023		2022		2023		2022
Net income (loss)	$	109,614	$	86,925	$	118,163	$	94,607
Other comprehensive income (loss):
Foreign currency translation adjustment	(12,631)		(16,974)		(8,078)		(40,499)
Unrealized gain (loss) on cash flow hedges, net of tax benefit (expense) of $(9,393) and $(10,907), for the three months ended September 30, 2023 and 2022, respectively; $(2,208) and $(20,086) for the six months ended September 30, 2023 and 2022, respectively.	26,486		49,412		18,230		91,894
Gain (loss) on intra-entity foreign currency transactions	(989)		(16,010)		(9,371)		(29,544)
Total other comprehensive income (loss)	12,866		16,428		781		21,851
Comprehensive income (loss)	$	122,480	$	103,353	$	118,944	$	116,458

See accompanying notes.

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Under Armour, Inc. and Subsidiaries

Condensed Consolidated Statements of Stockholders' Equity

(Unaudited; In thousands)


	Class A Common Stock			Class B Convertible Common Stock			Class C Common Stock			Additional Paid-in-Capital		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Total Equity
	Shares	Amount		Shares	Amount		Shares	Amount
Balance as of June 30, 2022	188,669	$	63	34,450	$	11	232,026	$	77	$	1,108,988	$	654,599	$	(34,663)	$	1,729,075
Shares withheld in consideration of employee tax obligations relative to stock-based compensation arrangements	—	—		—	—		(50)	—		—		(450)		—		(450)
Class C Common Stock repurchased	—	—		—	—		(3,244)	(1)		(250)		(24,749)		—		(25,000)
Issuance of Class A Common Stock, net of forfeitures	20	—		—	—		—	—		—		—		—		—
Issuance of Class C Common Stock, net of forfeitures	—	—		—	—		280	—		1,022		—		—		1,022
Stock-based compensation expense	—	—		—	—		—	—		8,333		—		—		8,333
Comprehensive income (loss)	—	—		—	—		—	—		—		86,925		16,428		103,353
Balance as of September 30, 2022	188,689	$	63	34,450	$	11	229,012	$	76	$	1,118,093	$	716,325	$	(18,235)	$	1,816,333

Balance as of March 31, 2022	188,669	$	63	34,450	$	11	238,472	$	79	$	1,046,961	$	721,926	$	(40,086)	$	1,728,954
Shares withheld in consideration of employee tax obligations relative to stock-based compensation arrangements	—	—		—	—		(85)	—		—		(802)		—		(802)
Class C Common Stock repurchased	—	—		—	—		(9,913)	(3)		49,409		(99,406)		—		(50,000)
Issuance of Class A Common Stock, net of forfeitures	20	—		—	—		—	—		—		—		—		—
Issuance of Class C Common Stock, net of forfeitures	—	—		—	—		538	—		2,015		—		—		2,015
Stock-based compensation expense	—	—		—	—		—	—		19,708		—		—		19,708
Comprehensive income (loss)	—	—		—	—		—	—		—		94,607		21,851		116,458
Balance as of September 30, 2022	188,689	$	63	34,450	$	11	229,012	$	76	$	1,118,093	$	716,325	$	(18,235)	$	1,816,333

See accompanying notes.

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Under Armour, Inc. and Subsidiaries

Condensed Consolidated Statements of Stockholders' Equity

(Unaudited; In thousands)


	Class A Common Stock			Class B Convertible Common Stock			Class C Common Stock			Additional Paid-in-Capital		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Total Equity
	Shares	Amount		Shares	Amount		Shares	Amount
Balance as of June 30, 2023	188,705	$	63	34,450	$	11	222,060	$	73	$	1,149,183	$	936,007	$	(79,927)	$	2,005,410
Shares withheld in consideration of employee tax obligations relative to stock-based compensation arrangements	—	—		—	—		(32)	—		—		(214)		—		(214)
Excise tax on repurchases of common stock	—	—		—	—		—	—		(425)		—		—		(425)
Class C Common Stock repurchased	—	—		—	—		(7,616)	(2)		1,299		(51,297)		—		(50,000)
Issuance of Class A Common Stock, net of forfeitures	20	—		—	—		—	—		—		—		—		—
Issuance of Class C Common Stock, net of forfeitures	—	—		—	—		277	—		911		—		—		911
Stock-based compensation expense	—	—		—	—		—	—		11,580		—		—		11,580
Comprehensive income (loss)	—	—		—	—		—	—		—		109,614		12,866		122,480
Balance as of September 30, 2023	188,725	$	63	34,450	$	11	214,689	$	71	$	1,162,548	$	994,110	$	(67,061)	$	2,089,742

Balance as of March 31, 2023	188,705	$	63	34,450	$	11	221,347	$	73	$	1,136,536	$	929,562	$	(67,842)	$	1,998,403
Shares withheld in consideration of employee tax obligations relative to stock-based compensation arrangements	—	—		—	—		(333)	—		—		(2,318)		—		(2,318)
Excise tax on repurchases of common stock	—	—		—	—		—	—		(425)		—		—		(425)
Class C Common Stock repurchased	—	—		—	—		(7,616)	(2)		1,299		(51,297)		—		(50,000)
Issuance of Class A Common Stock, net of forfeitures	20	—		—	—		—	—		—		—		—		—
Issuance of Class C Common Stock, net of forfeitures	—	—		—	—		1,291	—		1,781		—		—		1,781
Stock-based compensation expense	—	—		—	—		—	—		23,357		—		—		23,357
Comprehensive income (loss)	—	—		—	—		—	—		—		118,163		781		118,944
Balance as of September 30, 2023	188,725	$	63	34,450	$	11	214,689	$	71	$	1,162,548	$	994,110	$	(67,061)	$	2,089,742

See accompanying notes.

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Under Armour, Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(Unaudited; In thousands)


	Six Months Ended September 30,
	2023		2022
Cash flows from operating activities
Net income (loss)	$	118,163	$	94,607
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities
Depreciation and amortization	71,177		68,007
Unrealized foreign currency exchange rate (gain) loss	21,145		16,338
Loss on disposal of property and equipment	696		1,074
Amortization of bond premium and debt issuance costs	1,096		1,096
Stock-based compensation	23,357		19,708
Deferred income taxes	(10,788)		(2,021)
Changes in reserves and allowances	18,471		4,452
Changes in operating assets and liabilities:
Accounts receivable	(52,721)		(90,331)
Inventories	33,270		(266,824)
Prepaid expenses and other assets	(10,934)		(15,486)
Other non-current assets	49,659		(36,932)
Accounts payable	(120,353)		167,149
Accrued expenses and other liabilities	(75,751)		19,034
Customer refund liability	(11,244)		(5,475)
Income taxes payable and receivable	9,000		23,105
Net cash provided by (used in) operating activities	64,243		(2,499)
Cash flows from investing activities
Purchases of property and equipment	(84,144)		(93,864)
Earn-out from the sale of MyFitnessPal platform	45,000		35,000
Net cash provided by (used in) investing activities	(39,144)		(58,864)
Cash flows from financing activities
Common shares repurchased	(50,000)		(50,000)
Employee taxes paid for shares withheld for income taxes	(2,318)		(803)
Proceeds from exercise of stock options and other stock issuances	1,781		2,015
Net cash provided by (used in) financing activities	(50,537)		(48,788)
Effect of exchange rate changes on cash, cash equivalents and restricted cash	(28,671)		(43,962)
Net increase (decrease) in cash, cash equivalents and restricted cash	(54,109)		(154,113)
Cash, cash equivalents and restricted cash
Beginning of period	727,726		1,022,126
End of period	$	673,617	$	868,013

Non-cash investing and financing activities
Change in accrual for property and equipment	$	(10,333)	$	866


Reconciliation of cash, cash equivalents and restricted cash	September 30, 2023		September 30, 2022
Cash and cash equivalents	$	655,866	$	853,652
Restricted cash	17,751		14,361
Total cash, cash equivalents and restricted cash	$	673,617	$	868,013

See accompanying notes.

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Under Armour, Inc. and Subsidiaries

Notes to the Condensed Consolidated Financial Statements

(Unaudited; Tabular amounts in thousands, except share and per share data)

NOTE 1. DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION

Business

Under Armour, Inc. (together with its wholly owned subsidiaries, the "Company") is a developer, marketer and distributor of branded athletic performance apparel, footwear and accessories. The Company creates products engineered to make athletes better with a vision to inspire performance solutions you never knew you needed and can't imagine living without. The Company's products are made, sold and worn worldwide.

Basis of Presentation

The accompanying unaudited Condensed Consolidated Financial Statements are presented in U.S. Dollars and include the accounts of Under Armour, Inc. and its wholly owned subsidiaries. Certain information in footnote disclosures normally included in annual financial statements were condensed or omitted for the interim periods presented in accordance with the rules and regulations of the Securities and Exchange Commission (the "SEC") and accounting principles generally accepted in the United States of America ("U.S. GAAP") for interim consolidated financial statements. In the opinion of management, all adjustments consisting of normal, recurring adjustments considered necessary for a fair statement of the financial position and results of operations were included. Intercompany balances and transactions were eliminated upon consolidation. Additionally, certain prior period comparative amounts in the Condensed Consolidated Statement of Stockholders' Equity have been reclassified to conform to the current period presentation. Such reclassifications were not material and did not affect the Condensed Consolidated Financial Statements.

The unaudited Condensed Consolidated Balance Sheet as of September 30, 2023 is derived from the audited financial statements included in the Company's Annual Report on Form 10-K for the fiscal year ended March 31, 2023 ("Fiscal 2023"), filed with the SEC on May 24, 2023 ("Annual Report on Form 10-K for Fiscal 2023"), which should be read in conjunction with these unaudited Condensed Consolidated Financial Statements. The unaudited results for the three and six months ended September 30, 2023 are not necessarily indicative of the results to be expected for the fiscal year ending March 31, 2024 ("Fiscal 2024"), or any other portions thereof.

Management Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates, judgments and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the unaudited Condensed Consolidated Financial Statements and the reported amounts of revenues and expenses during the reporting period. These estimates, judgments and assumptions are evaluated on an on-going basis. The Company bases its estimates on historical experience and on various other assumptions that it believes are reasonable at that time; however, actual results could differ from these estimates.

As the impacts of major global events continue to evolve, estimates and assumptions about future events and their effects cannot be determined with certainty and therefore require increased judgment. The extent to which the evolving events impact the Company's financial statements will depend on a number of factors including, but not limited to, any new information that may emerge concerning the severity of these major events and the actions that governments around the world may take in response. While the Company believes it has made appropriate accounting estimates and assumptions based on the facts and circumstances available as of this reporting date, the Company may experience further impacts based on long-term effects on the Company's customers and the countries in which the Company operates. Please see the risk factors discussed in Part I, Item 1A "Risk Factors" of the Company's Annual Report on Form 10-K for Fiscal 2023.

NOTE 2. RECENT ACCOUNTING PRONOUNCEMENTS

Recently Adopted Account Pronouncements

The Company assesses the applicability and impact of all Accounting Standard Updates ("ASUs") issued by the Financial Accounting Standards Board ("FASB"). The following ASU was adopted during the first half of Fiscal 2024.

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Supplier Finance Programs

In September 2022, the FASB issued ASU 2022-04 "Liabilities - Supplier Finance Programs (Subtopic 405-50)" ("ASU 2022-04") which requires entities to disclose the key terms of supplier finance programs used in connection with the purchase of goods and services along with information about their obligations under these programs, including a rollforward of those obligations. The Company adopted ASU 2022-04 on April 1, 2023 on a retrospective basis, except for the amendments relating to the rollforward requirement, which are required to be adopted on April 1, 2024 on a prospective basis. The adoption did not have a material impact on the Company's Condensed Consolidated Financial Statements. Refer to Note 8 of the Condensed Consolidated Financial Statements for a discussion of the Company's supply chain finance program.

Recently Issued Accounting Pronouncements

The Company assessed all recently issued ASUs and determined them to be either not applicable or expected to have no material impact on its consolidated financial position and results of operations.

NOTE 3. ALLOWANCE FOR DOUBTFUL ACCOUNTS

The Company's allowance for doubtful accounts was established with information available as of September 30, 2023, including reasonable and supportable estimates of future risk. The following table illustrates the activity in the Company's allowance for doubtful accounts:


	Allowance for doubtful accounts - within accounts receivable, net		Allowance for doubtful accounts - within prepaid expenses and other current assets (1)
Balance as of March 31, 2023	$	10,813	$	227
Increases (decreases) to costs and expenses	6,570		—
Write-offs, net of recoveries	(67)		—
Balance as of September 30, 2023	$	17,316	$	227

(1) Includes an allowance pertaining to a royalty receivable.

NOTE 4. PROPERTY AND EQUIPMENT, NET

Property and equipment consisted of the following:


	As of September 30, 2023		As of March 31, 2023
Leasehold and tenant improvements	$	480,807	$	462,721
Furniture, fixtures and displays	289,449		289,539
Buildings	68,230		48,632
Software	392,474		380,586
Office equipment	133,474		132,301
Plant equipment	178,195		178,194
Land	82,410		83,626
Construction in progress (1)	145,308		143,243
Other	16,810		17,837
Subtotal property and equipment	1,787,157		1,736,679
Accumulated depreciation	(1,099,353)		(1,063,943)
Property and equipment, net	$	687,804	$	672,736

(1) Construction in progress primarily includes costs incurred for construction of corporate offices, software systems, leasehold improvements and in-store fixtures and displays not yet placed in use.

Depreciation expense related to property and equipment for the three and six months ended September 30, 2023 was $34.7 million and $70.4 million, respectively (three and six months ended September 30, 2022: $33.2 million and $67.1 million, respectively).

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NOTE 5. LEASES

The Company enters into operating leases domestically and internationally to lease certain warehouse space, office facilities, space for its Brand and Factory House stores, and certain equipment under non-cancelable operating leases. The leases expire at various dates through 2038, excluding extensions at the Company's option, and include provisions for rental adjustments. Short-term lease payments were not material for the three and six months ended September 30, 2023 and 2022.

Lease Costs and Other Information

The Company recognizes lease expense on a straight-line basis over the lease term. The following table illustrates operating and variable lease costs, included in selling, general and administrative expenses within the Company's Condensed Consolidated Statement of Operations, for the periods indicated:


	Three Months Ended September 30,				Six Months Ended September 30,
	2023		2022		2023		2022
Operating lease costs	$	41,632	$	36,010	$	82,723	$	71,565
Variable lease costs	$	2,056	$	4,360	$	4,812	$	7,983

There are no residual value guarantees that exist, and there are no restrictions or covenants imposed by leases. The Company rents or subleases certain excess office facilities and warehouse space to third parties. Sublease income is not material.

The weighted average remaining lease term and discount rate for the periods indicated below were as follows:


	As of September 30, 2023		As of March 31, 2023
Weighted average remaining lease term (in years)	7.93		8.03
Weighted average discount rate	4.89	%	4.69	%

Supplemental Cash Flow Information

The following table presents supplemental information relating to cash flow arising from lease transactions:


	Three Months Ended September 30,				Six Months Ended September 30,
	2023		2022		2023		2022
Operating cash outflows from operating leases	$	44,704	$	42,254	$	88,318	$	84,119
Leased assets obtained in exchange for new operating lease liabilities	$	16,079	$	87,971	$	21,459	$	107,560

Maturity of Lease Liabilities

The following table presents the future minimum lease payments under the Company's operating lease liabilities as of September 30, 2023:


Fiscal year ending March 31,
2024 (six months ending)	$	84,596
2025	164,966
2026	132,655
2027	110,184
2028	92,718
2029 and thereafter	372,202
Total lease payments	$	957,321
Less: Interest	161,160
Total present value of lease liabilities	$	796,161

As of September 30, 2023, the Company has additional operating lease obligations that have not yet commenced of approximately $9.3 million, which are not reflected in the table above.

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NOTE 6. GOODWILL

The following table summarizes changes in the carrying amount of the Company's goodwill by reportable segment as of the periods indicated:


	North America		EMEA		Asia-Pacific		Latin America		Total
Balance as of March 31, 2023	$	301,371	$	101,096	$	79,525	$	—	$	481,992
Effect of currency translation adjustment	—		(2,622)		(4,927)		—		(7,549)
Balance as of September 30, 2023	$	301,371	$	98,474	$	74,598	$	—	$	474,443

NOTE 7. INTANGIBLE ASSETS, NET

The following tables summarize the Company's intangible assets as of the periods indicated:


	Useful Lives from Date of Acquisitions (in years)	As of September 30, 2023
		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Intangible assets subject to amortization:
Customer relationships	2-6	8,442		(4,918)		3,524
Lease-related intangible assets	1-15	1,690		(1,592)		98
Total		$	10,132	$	(6,510)	$	3,622
Indefinite-lived intangible assets						4,507
Intangible assets, net						$	8,129


	Useful Lives from Date of Acquisitions (in years)	As of March 31, 2023
		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Intangible assets subject to amortization:
Technology	5-7	$	2,536	$	(2,503)	$	33
Customer relationships	2-6	8,711		(4,377)		4,334
Lease-related intangible assets	1-15	1,664		(1,542)		122
Total		$	12,911	$	(8,422)	$	4,489
Indefinite-lived intangible assets						4,451
Intangible assets, net						$	8,940

Amortization expense, which is included in selling, general and administrative expenses, for the three and six months ended September 30, 2023 was $0.4 million and $0.7 million, respectively (three and six months ended September 30, 2022: $0.5 million and $0.9 million, respectively).

During the six months ended September 30, 2023, the Company reduced the gross carrying amount and related accumulated amortization of technology assets by $2.5 million as a result of such assets being fully amortized.

The following is the estimated future amortization expense for the Company's intangible assets as of September 30, 2023:


Fiscal year ending March 31,
2024 (six months ending)	$	747
2025	1,494
2026	1,372
2027	9
2028	—
2029 and thereafter	—
Total amortization expense of intangible assets	$	3,622

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NOTE 8. SUPPLY CHAIN FINANCE PROGRAM

The Company facilitates a supply chain finance program, administered through third party platforms, which provides participating suppliers with the opportunity to finance payments due from the Company with certain third-party financial institutions. Participating suppliers may, at their sole discretion, elect to finance one or more invoices of the Company prior to their scheduled due dates at a discounted price with the participating financial institution.

The Company’s obligations to its suppliers, including amounts due and scheduled payment dates, are not impacted by the supplier’s decision to finance amounts under these arrangements. As such, the outstanding payment obligations under the Company’s supply chain financing program are included within Accounts Payable in the Condensed Consolidated Balance Sheets and within operating activities in the Condensed Consolidated Statement of Cash Flows.

The Company’s outstanding payment obligations under this program were $175.8 million as of September 30, 2023 (March 31, 2023: $250.8 million).

NOTE 9. CREDIT FACILITY AND OTHER LONG-TERM DEBT

The Company's outstanding debt consisted of the following:


	As of September 30, 2023		As of March 31, 2023
1.50% Convertible Senior Notes due 2024	$	80,919	$	80,919
3.25% Senior Notes due 2026	600,000		600,000
Total principal payments due	680,919		680,919

Unamortized debt discount on Senior Notes	(687)		(814)
Unamortized debt issuance costs - Convertible Senior Notes	(62)		(267)
Unamortized debt issuance costs - Senior Notes	(1,459)		(1,728)
Unamortized debt issuance costs - Credit facility	(3,137)		(3,632)
Total amount outstanding	675,574		674,478
Less:
Current portion of long-term debt:
1.50% Convertible Senior Notes due 2024	80,919		—

Non-current portion of long-term debt	$	594,655	$	674,478

Credit Facility

On March 8, 2019, the Company entered into an amended and restated credit agreement by and among the Company, as borrower, JPMorgan Chase Bank, N.A., as administrative agent, and the other lenders and arrangers party thereto (the "credit agreement"). In May 2020, May 2021 and December 2021, the Company entered into the first, second and third amendments to the credit agreement, respectively (the credit agreement as amended, the "amended credit agreement" or the "revolving credit facility"). The amended credit agreement provides for revolving credit commitments of $1.1 billion and has a term that ends on December 3, 2026, with permitted extensions under certain circumstances. As of September 30, 2023 and March 31, 2023, there were no amounts outstanding under the revolving credit facility.

At the Company's request and a lender's consent, commitments under the amended credit agreement may be increased by up to $300.0 million in aggregate, subject to certain conditions as set forth in the amended credit agreement. Incremental borrowings are uncommitted and the availability thereof will depend on market conditions at the time the Company seeks to incur such borrowings.

Borrowings, if any, under the revolving credit facility have maturities of less than one year. Up to $50.0 million of the facility may be used for the issuance of letters of credit. As of September 30, 2023, there were $4.3 million of letters of credit outstanding (March 31, 2023: $4.4 million).

The obligations of the Company under the amended credit agreement are guaranteed by certain domestic significant subsidiaries of Under Armour, Inc., subject to customary exceptions (the "subsidiary guarantors") and primarily secured by a first-priority security interest in substantially all of the assets of Under Armour, Inc. and the

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subsidiary guarantors, excluding real property, capital stock in and debt of subsidiaries of Under Armour, Inc. holding certain real property and other customary exceptions. The amended credit agreement provides for the permanent fall away of guarantees and collateral upon the Company's achievement of investment grade rating from two rating agencies.

The amended credit agreement contains negative covenants that, subject to significant exceptions, limit the Company's ability to, among other things: incur additional secured and unsecured indebtedness; pledge the assets as security; make investments, loans, advances, guarantees and acquisitions (including investments in and loans to non-guarantor subsidiaries); undergo fundamental changes; sell assets outside the ordinary course of business; enter into transactions with affiliates; and make restricted payments.

The Company is also required to maintain a ratio of consolidated EBITDA, to consolidated interest expense of not less than 3.50 to 1.0 (the "interest coverage covenant") and the Company is not permitted to allow the ratio of consolidated total indebtedness to consolidated EBITDA to be greater than 3.25 to 1.0 (the "leverage covenant"), as described in more detail in the amended credit agreement. As of September 30, 2023, the Company was in compliance with the applicable covenants.

In addition, the amended credit agreement contains events of default that are customary for a facility of this nature, and includes a cross default provision whereby an event of default under other material indebtedness, as defined in the amended credit agreement, will be considered an event of default under the amended credit agreement.

The amended credit agreement implements SOFR as the replacement of LIBOR as a benchmark interest rate for U.S. dollar borrowings (and analogous benchmark rate replacements for borrowings in Yen, Canadian dollars, Pound Sterling and Euro). Borrowings under the amended credit agreement bear interest at a rate per annum equal to, at the Company's option, either (a) an alternate base rate (for borrowings in U.S. dollars), (b) a term rate (for borrowings in U.S. dollars, Euro, Japanese Yen or Canadian dollars) or (c) a "risk free" rate (for borrowings in U.S. dollars or Pounds Sterling), plus in each case an applicable margin. The applicable margin for loans will be adjusted by reference to a grid (the "pricing grid") based on the leverage ratio of consolidated total indebtedness to consolidated EBITDA and ranges between 1.00% to 1.75% (or, in the case of alternate base loans, 0.00% to 0.75%). The Company will also pay a commitment fee determined in accordance with the pricing grid on the average daily unused amount of the revolving credit facility and certain fees with respect to letters of credit. As of September 30, 2023, the commitment fee was 17.5 basis points.

1.50% Convertible Senior Notes

The Company has approximately $80.9 million aggregate principal amount of 1.50% convertible senior notes due 2024 (the "Convertible Senior Notes") outstanding as of September 30, 2023, which were issued in May 2020. The Convertible Senior Notes bear interest at the fixed rate of 1.50% per annum, payable semiannually in arrears on June 1 and December 1 of each year, beginning December 1, 2020. The Convertible Senior Notes will mature on June 1, 2024, unless earlier converted in accordance with their terms, redeemed in accordance with their terms or repurchased.

The Convertible Senior Notes are not secured and are not guaranteed by any of the Company's subsidiaries. The indenture governing the Convertible Senior Notes does not contain any financial or operating covenants or restrictions on the payments of dividends, the incurrence of indebtedness or the issuance or repurchase of securities by the Company or any of its subsidiaries.

The Convertible Senior Notes are convertible into cash, shares of the Company's Class C Common Stock or a combination of cash and shares of Class C Common Stock, at the Company's election, as described further below. The initial conversion rate is 101.8589 shares of the Company's Class C Common Stock per $1,000 principal amount of Convertible Senior Notes (equivalent to an initial conversion price of approximately $9.82 per share of Class C Common Stock), subject to adjustment if certain events occur. Prior to the close of business on the business day immediately preceding January 1, 2024, holders may (at their option) convert their Convertible Senior Notes only upon satisfaction of one or more of the following conditions:

•during any calendar quarter commencing after the calendar quarter ended on September 30, 2020 (and only during such calendar quarter), if the last reported sale price of the Company's Class C Common Stock for at least 20 trading days (whether or not consecutive) during the period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price on each applicable trading day;

•during the five business day period after any five consecutive trading day period (the "measurement period") in which the trading price per $1,000 principal amount of Convertible Senior Notes for each trading

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day of the measurement period was less than 98% of the product of the last reported sale price of the Company's Class C Common Stock and the conversion rate on each such trading day;

•upon the occurrence of specified corporate events or distributions on the Company's Class C Common Stock; or

•if the Company calls any Convertible Senior Notes for redemption prior to the close of business on the business day immediately preceding January 1, 2024.

On or after January 1, 2024, until the close of business on the second scheduled trading day immediately preceding the maturity date, holders may convert all or any portion of their Convertible Senior Notes at the conversion rate at any time irrespective of the foregoing conditions.

Beginning on December 6, 2022, the Company may redeem for cash all or any part of the Convertible Senior Notes, at its option, if the last reported sale price of the Company's Class C Common Stock has been at least 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period (including the last trading day of such period) ending on, and including, the trading day immediately preceding the date on which the Company provides notice of redemption at a redemption price equal to 100% of the aggregate principal amount of the Convertible Senior Notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date.

If the Company undergoes a fundamental change (as defined in the indenture governing the Convertible Senior Notes) prior to the maturity date, subject to certain conditions, holders may require the Company to repurchase for cash all or any portion of their Convertible Senior Notes in principal amounts of $1,000 or an integral multiple thereof at a price which will be equal to 100% of the aggregate principal amount of the Convertible Senior Notes to be repurchased, plus accrued and unpaid interest to, but excluding, the fundamental change repurchase date.

Concurrently with the offering of the Convertible Senior Notes, the Company entered into privately negotiated capped call transactions with JPMorgan Chase Bank, National Association, HSBC Bank USA, National Association, and Citibank, N.A. (the "option counterparties"). The capped call transactions are expected generally to reduce potential dilution to the Company's Class C Common Stock upon any conversion of Convertible Senior Notes and/or offset any cash payments the Company is required to make in excess of the aggregate principal amount of converted Convertible Senior Notes upon any conversion thereof, as the case may be, with such reduction and/or offset subject to a cap based on the cap price. The cap price of the capped call transactions is initially $13.4750 per share of the Company's Class C Common Stock, representing a premium of 75% above the last reported sale price of the Company's Class C Common Stock on May 21, 2020, and is subject to certain adjustments under the terms of the capped call transactions.

3.250% Senior Notes

In June 2016, the Company issued $600.0 million aggregate principal amount of 3.250% senior unsecured notes due June 15, 2026 (the "Senior Notes"). The Senior Notes bear interest at the fixed rate of 3.250% per annum, payable semi-annually on June 15 and December 15 beginning December 15, 2016. The Company may redeem some or all of the Senior Notes at any time, or from time to time, at redemption prices described in the indenture governing the Senior Notes. The indenture governing the Senior Notes contains negative covenants that limit the Company's ability to engage in certain transactions and are subject to material exceptions described in the indenture. The Company incurred and deferred $5.4 million in financing costs in connection with the Senior Notes.

Interest Expense

Interest expense, which includes amortization of deferred financing costs, bank fees, capital and built-to-suit lease interest and interest expense under the credit and other long-term debt facilities, was $5.5 million and $11.3 million, respectively, for the three and six months ended September 30, 2023 (three and six months ended September 30, 2022: $6.5 million and $13.2 million, respectively).

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The following are the scheduled maturities of long-term debt as of September 30, 2023:


Fiscal year ending March 31,
2024 (six months ending)	$	—
2025	80,919
2026	—
2027	600,000
2028	—
2029 and thereafter	—
Total scheduled maturities of long-term debt	$	680,919

Current maturities of long-term debt	$	80,919

The Company monitors the financial health and stability of its lenders under the credit and other long-term debt facilities, however during any period of significant instability in the credit markets, lenders could be negatively impacted in their ability to perform under these facilities.

NOTE 10. COMMITMENTS AND CONTINGENCIES

From time to time, the Company is involved in litigation and other proceedings, including matters related to commercial and intellectual property disputes, as well as trade, regulatory and other claims related to its business. Other than as described below, the Company believes that all current proceedings are routine in nature and incidental to the conduct of its business. However, the matters described below, if decided adversely to or settled by the Company, could result, individually or in the aggregate, in a liability material to the Company's consolidated financial position, results of operations or cash flows.

In re Under Armour Securities Litigation

On March 23, 2017, three separate securities cases previously filed against the Company in the United States District Court for the District of Maryland (the "District Court") were consolidated under the caption In re Under Armour Securities Litigation, Case No. 17-cv-00388-RDB (the "Consolidated Securities Action"). On September 14, 2020, the District Court issued an order that, among other things, consolidated two additional securities cases into the Consolidated Securities Action.

The operative complaint (the "TAC") in the Consolidated Securities Action was filed on October 14, 2020. The TAC asserts claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), against the Company and Mr. Plank and under Section 20A of the Exchange Act against Mr. Plank. The TAC alleges that the defendants supposedly concealed purportedly declining consumer demand for certain of the Company's products between the third quarter of 2015 and the fourth quarter of 2016 by making allegedly false and misleading statements regarding the Company's performance and future prospects and by engaging in undisclosed and allegedly improper sales and accounting practices, including shifting sales between quarterly periods allegedly to appear healthier. The TAC also alleges that the defendants purportedly failed to disclose that the Company was under investigation by and cooperating with the U.S. Department of Justice ("DOJ") and the U.S. Securities and Exchange Commission (the "SEC") since July 2017. The class period identified in the TAC is September 16, 2015 through November 1, 2019.

On July 23, 2021, the Company and Mr. Plank filed an answer to the TAC denying all allegations of wrongdoing and asserting affirmative defenses to the claims asserted in the TAC. On December 1, 2021, the plaintiffs filed a motion seeking, among other things, certification of the class they are seeking to represent in the Consolidated Securities Action. On September 29, 2022, the court granted the plaintiffs' class certification motion. Discovery in the Consolidated Securities Action concluded on August 31, 2023. On October 2, 2023, the Company and Mr. Plank filed a motion for summary judgment seeking an order dismissing the Consolidated Securities Action with prejudice. Briefing on that motion is not yet complete. The District Court has scheduled trial to begin on July 15, 2024.

The Company continues to believe that the claims asserted in the Consolidated Securities Action are without merit and intends to defend the lawsuit vigorously.

Consolidated Kenney Derivative Litigation

In June and July 2018, two purported stockholder derivative complaints were filed in Maryland state court (in cases captioned Kenney v. Plank, et al. (filed June 29, 2018) and Luger v. Plank, et al. (filed July 26, 2018), respectively). The cases were consolidated on October 19, 2018 under the caption Kenney v. Plank, et. al. The

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consolidated complaint in the Kenney action names Mr. Plank, certain other current and former members of the Company's Board of Directors, certain former Company executives, and Sagamore Development Company, LLC ("Sagamore") as defendants, and names the Company as a nominal defendant. The consolidated complaint asserts breach of fiduciary duty, unjust enrichment, and corporate waste claims against the individual defendants and asserts a claim against Sagamore for aiding and abetting certain of the alleged breaches of fiduciary duty. The consolidated complaint seeks damages on behalf of the Company and certain corporate governance related actions.

The consolidated complaint includes allegations challenging, among other things, the Company's disclosures related to growth and consumer demand for certain of the Company's products, as well as stock sales by certain individual defendants. The consolidated complaint also makes allegations related to the Company's 2016 purchase from entities controlled by Mr. Plank (through Sagamore) of certain parcels of land to accommodate the Company's growth needs, which was approved by the Audit Committee of the Company's Board of Directors in accordance with the Company's policy on transactions with related persons.

On March 29, 2019, the court in the Kenney action granted the Company's and the defendants' motion to stay that case pending the outcome of both the Consolidated Securities Action and an earlier-filed derivative action asserting similar claims to those asserted in the Kenney action relating to the Company's purchase of parcels in the Baltimore Peninsula, an area of Baltimore previously referred to as Port Covington (which derivative action has since been dismissed in its entirety).

Prior to the filing of the derivative complaints in Kenney v. Plank, et al. and Luger v. Plank, et al., both of the purported stockholders had sent the Company's Board of Directors a letter demanding that the Company pursue claims similar to the claims asserted in the derivative complaints. Following an investigation, a majority of disinterested and independent directors of the Company determined that the claims should not be pursued by the Company and both of these purported stockholders were informed of that determination.

In 2020, two additional purported shareholder derivative complaints were filed in Maryland state court, in cases captioned Cordell v. Plank, et al. (filed August 11, 2020) and Salo v. Plank, et al. (filed October 21, 2020), respectively.

Prior to the filing of the derivative complaints in these two actions, neither of the purported stockholders made a demand that the Company's Board of Directors pursue the claims asserted in the complaints. In October 2021, the court issued an order (i) consolidating the Cordell and Salo actions with the consolidated Kenney action into a single consolidated derivative action (the "Consolidated Kenney Derivative Action"); (ii) designating the Kenney action as the lead case; and (iii) specifying that the scheduling order in the Kenney action shall control the Consolidated Kenney Derivative Action.

The Company believes that the claims asserted in the Consolidated Kenney Derivative Action are without merit and intends to defend this matter vigorously. However, because of the inherent uncertainty as to the outcome of this proceeding, the Company is unable at this time to estimate the possible impact of the outcome of this matter.

Consolidated Paul Derivative Litigation

On January 27, 2021, the District Court entered an order consolidating for all purposes four separate stockholder derivative cases that previously had been filed in the court. On February 2, 2023, the District Court issued an order appointing Balraj Paul and Anthony Viskovich as lead plaintiffs (“Derivative Lead Plaintiffs”), appointing counsel for the Derivative Lead Plaintiffs as lead counsel, and recaptioning the consolidated case as Paul et al. v. Plank et al. (the “Paul Derivative Action”). Prior to their filing derivative complaints, both of the Derivative Lead Plaintiffs had sent the Company's Board of Directors a letter demanding that the Company pursue claims similar to the claims asserted in the derivative complaints. Following an investigation, a majority of disinterested and independent directors of the Company determined that the claims should not be pursued by the Company, and the Derivative Lead Plaintiffs were informed of that determination.

On March 16, 2023, the District Court issued an order granting a motion for voluntary dismissal without prejudice that had been filed by the plaintiff in one of the four derivative cases who had not been appointed as a lead plaintiff.

On April 24, 2023, the Derivative Lead Plaintiffs designated an operative complaint in the Paul Derivative Action. The operative complaint named Mr. Plank, certain other current and former members of the Company's Board of Directors, and certain other current and former Company executives as defendants, and named the Company as a nominal defendant. It asserted allegations similar to those in the TAC filed in the Consolidated Securities Action matter discussed above, including allegations challenging (i) the Company's disclosures related to growth and consumer demand for certain of the Company's products; (ii) the Company's practice of shifting sales

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between quarterly periods supposedly to appear healthier and its purported failure to disclose that practice; (iii) the Company's internal controls with respect to revenue recognition and inventory management; and (iv) the Company's supposed failure to timely disclose investigations by the SEC and DOJ. The operative complaint asserted breach of fiduciary duty and unjust enrichment claims against the defendants and asserted a contribution claim against certain defendants. The operative complaint sought damages on behalf of the Company and also sought certain corporate governance related actions.

The Company and the defendants filed a motion to dismiss the operative complaint on June 23, 2023. The District Court granted that motion on September 27, 2023, dismissing the Paul Derivative Action without prejudice, due to lack of subject matter jurisdiction.

Paul, one of the plaintiffs in the Paul Derivative Action, has filed a motion seeking reconsideration of the dismissal decision or leave to amend the complaint. Briefing on that motion will be completed as of November 8, 2023.

On October 27, 2023, the plaintiffs in the Paul Derivative Action other than Paul filed a stockholder derivative complaint in Maryland state court (in a case captioned Viskovich, et al. v. Plank, et al). The complaint asserts claims similar to those that had been asserted in the operative complaint in the Paul Derivative Action before that action was dismissed and seeks similar remedies (including damages and certain corporate governance related actions). The complaint names Mr. Plank, certain other current and former members of the Company's Board of Directors, and certain other current and former Company executives as defendants, and names the Company as a nominal defendant. The defendants and the Company are not under any present obligation to respond to the complaint in the Viskovich action.

The Company believes that the claims asserted in the Paul Derivative Action and the Viskovich action are without merit and intends to defend this matter vigorously. However, because of the inherent uncertainty as to the outcome of this proceeding, the Company is unable at this time to estimate the possible impact of the outcome of this matter.

Contingencies

In accordance with Accounting Standards Codification (“ASC”) Topic 450 “Contingencies” (“Topic 450”), the Company establishes accruals for contingencies when (i) the Company believes it is probable that a loss will be incurred and (ii) the amount of the loss can be reasonably estimated. If the reasonable estimate is a range, the Company will accrue the best estimate in that range; where no best estimate can be determined, the Company will accrue the minimum. As of September 30, 2023, the Company has estimated its liability and recorded $20 million in respect of certain ongoing legal proceedings summarized above. The timing of the resolution is unknown and the amount of loss ultimately incurred in connection with these matters may be substantially higher than the amount accrued for these matters, and the Company expects a portion of the loss, if any is incurred, to be covered by the Company’s insurance. Legal proceedings for which no accrual has been established are disclosed to the extent required by ASC 450.

In addition, in connection with the matters described above and previously disclosed government investigations, the Company provided notice of claims under multiple director and officer liability insurance policy periods. With respect to one policy period, a lawsuit was filed against the Company by certain of its insurance carriers seeking a declaration that no further amounts will be payable with respect to that policy period and with respect to one carrier, seeking reimbursement for amounts previously paid to the Company. On April 26, 2023, the Company and one of its insurance carriers resolved the dispute related to that carrier’s claims for a declaration that no further amounts would be payable and seeking reimbursement of previously paid amounts. The resolution resulted in no reimbursement payable by the Company. The other carriers remaining in the case continue to seek a declaration that no further amounts will be payable with respect to that policy period. The timing of the resolution for the remaining claims in this matter is unknown.

From time to time, the Company’s view regarding probability of loss with respect to outstanding legal proceedings will change, proceedings for which the Company is able to estimate a loss or range of loss will change, and the estimates themselves will change. In addition, while many matters presented in financial disclosures involve significant judgment and may be subject to significant uncertainties, estimates with respect to legal proceedings are subject to particular uncertainties. Other than as described above, the Company believes that all current proceedings are routine in nature and incidental to the conduct of its business. However, the matters described above, if decided adversely to or settled by the Company, could result, individually or in the aggregate, in a liability material to the Company's consolidated financial position, results of operations or cash flows.

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NOTE 11. STOCKHOLDERS' EQUITY

The Company's Class A Common Stock and Class B Convertible Common Stock have an authorized number of 400.0 million shares and 34.45 million shares, respectively, and each have a par value of $0.0003 1/3 per share as of September 30, 2023. Holders of Class A Common Stock and Class B Convertible Common Stock have identical rights, including liquidation preferences, except that the holders of Class A Common Stock are entitled to one vote per share and holders of Class B Convertible Common Stock are entitled to 10 votes per share on all matters submitted to a stockholder vote. Class B Convertible Common Stock may only be held by Kevin Plank, the Company's founder, Executive Chair and Brand Chief, or a related party of Mr. Plank, as defined in the Company's charter. As a result, Mr. Plank has a majority voting control over the Company. Upon the transfer of shares of Class B Convertible Stock to a person other than Mr. Plank or a related party of Mr. Plank, the shares automatically convert into shares of Class A Common Stock on a one-for-one basis. In addition, all of the outstanding shares of Class B Convertible Common Stock will automatically convert into shares of Class A Common Stock on a one-for-one basis upon the death or disability of Mr. Plank or on the record date for any stockholders' meeting upon which the shares of Class A Common Stock and Class B Convertible Common Stock beneficially owned by Mr. Plank is less than 15% of the total shares of Class A Common Stock and Class B Convertible Common Stock outstanding or upon the other events specified in the Class C Articles Supplementary to the Company's charter as documented below. Holders of the Company's common stock are entitled to receive dividends when and if authorized and declared out of assets legally available for the payment of dividends.

The Company's Class C Common Stock has an authorized number of 400.0 million shares and has a par value of $0.0003 1/3 per share as of September 30, 2023. The terms of the Class C Common Stock are substantially identical to those of the Company's Class A Common Stock, except that the Class C Common Stock has no voting rights (except in limited circumstances), will automatically convert into Class A Common Stock under certain circumstances and includes provisions intended to ensure equal treatment of Class C Common Stock and Class B Common Stock in certain corporate transactions, such as mergers, consolidations, statutory share exchanges, conversions or negotiated tender offers, and including consideration incidental to these transactions.

Share Repurchase Program

On February 23, 2022, the Company's Board of Directors authorized the Company to repurchase up to $500 million (exclusive of fees and commissions) of outstanding shares of the Company's Class C Common Stock over the next two years. The Class C Common Stock may be repurchased from time to time at prevailing prices in the open market, through plans designed to comply with Rule 10b5-1 under the Securities Exchange Act of 1934, as amended, via private purchases through forward, derivative, accelerated share repurchase transactions or otherwise, subject to applicable regulatory restrictions on volume, pricing and timing. The timing and amount of any repurchases will depend on market conditions, the Company's financial condition, results of operations, liquidity and other factors.

During the three months ended September 30, 2023, the Company entered into a supplemental confirmation (the "August 2023 ASR Agreement") of an accelerated share repurchase transaction with JPMorgan Chase Bank, National Association ("JPMC") to repurchase $50.0 million of the Company's Class C Common Stock, and received a total of 7.6 million shares of Class C Common Stock from JPMC, which were immediately retired. As a result, $51.3 million was recorded to retained earnings to reflect the difference between the market price of the Class C Common Stock repurchased and its par value. No shares were repurchased under the share repurchase program during the three months ended June 30, 2023.

During the three and six months ended September 30, 2022, pursuant to the previously disclosed accelerated share repurchase transactions, the Company repurchased 3.2 million and 9.9 million shares of Class C Common Stock, respectively, which were immediately retired.

As of September 30, 2023, the Company has repurchased a total of $475 million or 42.5 million outstanding shares of its Class C Common Stock under its share repurchase program.

On August 16, 2022, the Inflation Reduction Act (the "Act") was enacted and signed into law in the United States, which imposed a 1.0% excise tax on corporate stock repurchases in tax years beginning after December 31, 2022. As a result, the Company accrued $0.4 million of excise tax in connection with the share repurchases completed during the six months ended September 30, 2023, which was recorded in other current liabilities on the Condensed Consolidated Balance Sheets as of September 30, 2023.

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NOTE 12. REVENUES

The following tables summarize the Company's net revenues by product category and distribution channels:


	Three Months Ended September 30,				Six Months Ended September 30,
	2023		2022		2023		2022
Apparel	$	1,070,437	$	1,038,268	$	1,895,097	$	1,906,696
Footwear	351,202		375,885		714,872		723,136
Accessories	113,933		111,117		211,795		207,948
Net Sales	1,535,572		1,525,270		2,821,764		2,837,780
License revenues	28,646		33,123		53,718		61,258
Corporate Other	2,492		15,492		8,240		23,904
Total net revenues	$	1,566,710	$	1,573,885	$	2,883,722	$	2,922,942


	Three Months Ended September 30,				Six Months Ended September 30,
	2023		2022		2023		2022
Wholesale	$	939,725	$	948,154	$	1,681,683	$	1,739,840
Direct-to-consumer	595,847		577,116		1,140,081		1,097,940
Net Sales	1,535,572		1,525,270		2,821,764		2,837,780
License revenues	28,646		33,123		53,718		61,258
Corporate Other	2,492		15,492		8,240		23,904
Total net revenues	$	1,566,710	$	1,573,885	$	2,883,722	$	2,922,942

The Company records reductions to revenue for estimated customer returns, allowances, markdowns and discounts. These reserves are included within customer refund liability and the value of the inventory associated with reserves for sales returns are included within prepaid expenses and other current assets on the Condensed Consolidated Balance Sheets. The following table presents the customer refund liability, as well as the associated value of inventory for the periods indicated:


	As of September 30, 2023		As of March 31, 2023
Customer refund liability	$	149,451	$	160,533
Inventory associated with reserves for sales returns	$	33,722	$	40,661

Contract Liabilities

Contract liabilities are recorded when a customer pays consideration, or the Company has a right to an amount of consideration that is unconditional, before the transfer of a good or service to the customer, and thus represent the Company's obligation to transfer the good or service to the customer at a future date. The Company's contract liabilities primarily consist of payments received in advance of revenue recognition for subscriptions for the Company's digital fitness applications and royalty arrangements which are in in other current and other long-term liabilities, and gift cards, included in accrued expenses on the Company's Condensed Consolidated Balance Sheets. As of September 30, 2023, contract liabilities were $23.4 million (March 31, 2023: $25.9 million).

For the three and six months ended September 30, 2023, the Company recognized approximately $1.9 million and $5.1 million, respectively, of revenue that was previously included in contract liabilities as of March 31, 2023. For the three and six months ended September 30, 2022, the Company recognized approximately $1.3 million and $6.1 million, respectively, of revenue that was previously included in contract liabilities as of March 31, 2022. The change in the contract liabilities balance primarily results from the timing differences between the Company's satisfaction of performance obligations and the customer's payment.

NOTE 13. OTHER EMPLOYEE BENEFITS

The Company offers a 401(k) Deferred Compensation Plan for the benefit of eligible employees. Employee contributions are voluntary and subject to Internal Revenue Service limitations. The Company matches a portion of the participant's contribution and recorded expense for the three and six months ended September 30, 2023 of $3.4

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million and $6.7 million, respectively (three and six months ended September 30, 2022: $2.6 million and $4.2 million, respectively).

In addition, the Company offers the Under Armour, Inc. Deferred Compensation Plan (the "Deferred Compensation Plan") which allows a select group of management or highly compensated employees, as approved by the Human Capital and Compensation Committee of the Board of Directors, to make an annual base salary and/or bonus deferral for each year. As of September 30, 2023, the Deferred Compensation Plan obligations, which are included in other long-term liabilities on the Condensed Consolidated Balance Sheets, were $14.3 million (March 31, 2023: $14.1 million).

The Company established a Rabbi Trust to fund obligations to participants in the Deferred Compensation Plan. As of September 30, 2023, the assets held in the Rabbi Trust were trust owned life insurance ("TOLI") policies with cash-surrender values of $7.7 million (March 31, 2023: $7.7 million). These assets are consolidated and are included in other long-term assets on the Condensed Consolidated Balance Sheets.

Refer to Note 15 of the Condensed Consolidated Financial Statements for a discussion of the fair value measurements of the assets held in the Rabbi Trust and the Deferred Compensation Plan obligations.

NOTE 14. STOCK BASED COMPENSATION

The Under Armour, Inc. Fourth Amended and Restated 2005 Omnibus Long-Term Incentive Plan as amended (the "2005 Plan") provides for the issuance of stock options, restricted stock, restricted stock units and other equity awards to officers, directors, key employees and other persons. The 2005 Plan terminates in 2033. As of September 30, 2023, 8.3 million Class A shares and 33.1 million Class C shares are available for future grants of awards under the 2005 Plan.

Awards Granted to Employees and Non-Employee Directors

Total stock-based compensation expense associated with awards granted to employees and non-employee directors for the three and six months ended September 30, 2023 was $10.0 million and $20.3 million, respectively (three and six months ended September 30, 2022: $8.3 million and $19.7 million, respectively). As of September 30, 2023, the Company had $97.8 million of unrecognized compensation expense related to these awards expected to be recognized over a weighted average period of 2.16 years. The unrecognized expense does not include any expense related to performance-based restricted stock unit awards for which the performance targets have been deemed improbable as of September 30, 2023. Refer to "Stock Options" and "Restricted Stock and Restricted Stock Unit Awards" below for further information on these awards.

A summary of each of these plans is as follows:

Employee Stock Compensation Plan

Stock options, restricted stock and restricted stock unit awards under the 2005 Plan generally vest ratably over a period of two to five years. The contractual term for stock options is generally 10 years from the date of grant. The Company generally receives a tax deduction for any ordinary income recognized by a participant in respect to an award under the 2005 Plan.

Non-Employee Director Compensation Plan

The Company's Non-Employee Director Compensation Plan (the "Director Compensation Plan") provides for cash compensation and equity awards to non-employee directors of the Company under the 2005 Plan. Non-employee directors have the option to defer the value of their annual cash retainers as deferred stock units in accordance with the Under Armour, Inc. Non-Employee Deferred Stock Unit Plan (the "DSU Plan"). Each new non-employee director receives an award of restricted stock units upon the initial election to the Board of Directors, with the units covering stock valued at $100 thousand on the grant date and vesting in three equal annual installments. In addition, each non-employee director receives, following each annual stockholders' meeting, a grant under the 2005 Plan of restricted stock units covering stock valued at $150 thousand on the grant date. Each award vests 100% on the date of the next annual stockholders' meeting following the grant date.

The receipt of the shares otherwise deliverable upon vesting of the restricted stock units automatically defers into deferred stock units under the DSU Plan. Under the DSU Plan each deferred stock unit represents the Company’s obligation to issue one share of the Company's Class A or Class C Common Stock with the shares delivered six months following the termination of the director's service. The Company had 0.8 million deferred stock units outstanding as of September 30, 2023.

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Employee Stock Purchase Plan

The Company's Employee Stock Purchase Plans (the "ESPPs") allow for the purchase of Class A Common Stock and Class C Common Stock by all eligible employees at a 15% discount from fair market value subject to certain limits as defined in the ESPPs. As of September 30, 2023, 2.7 million Class A shares and 0.8 million Class C shares are available for future purchases under the ESPPs. During the three and six months ended September 30, 2023, 156.9 thousand and 302.1 thousand Class C shares, respectively, were purchased under the ESPPs (three and six months ended September 30, 2022: 171.6 thousand and 293.0 thousand, respectively).

Awards granted to Certain Marketing and Other Partners

In addition to the plans discussed above, the Company may also, from time to time, issue deferred stock units or restricted stock units to certain of our marketing and other partners in connection with their entering into endorsement or other service agreements with the Company. The terms of each agreement set forth the number of units to be granted and the delivery dates for the shares, which range over a multi-year period, depending on the contract.

Total stock-based compensation expense related to these awards for the three and six months ended September 30, 2023 was $2.4 million and $4.7 million, respectively (three and six months ended September 30, 2022: $0.8 million and $1.7 million, respectively). As of September 30, 2023, the Company had $75.2 million of unrecognized compensation expense associated with these awards expected to be recognized over a weighted average period of 10.61 years.

Summary by Award Classification:

Stock Options

A summary of the Company's stock options activity for the six months ended September 30, 2023 is presented below:


	Number of Stock Options	Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (Years)	Total Intrinsic Value
Outstanding at March 31, 2023	1,578	$	19.44	4.82	$	—
Granted, at fair market value	—	—		—	—
Exercised	—	—		—	—
Forfeited	—	—		—	—
Outstanding at September 30, 2023	1,578	$	19.44	4.32	$	—
Options exercisable at September 30, 2023	1,503	$	19.66	4.22	$	—

Restricted Stock and Restricted Stock Unit Awards

A summary of the Company's restricted stock and restricted stock unit awards activity for the six months ended September 30, 2023 is presented below:


	Number of Restricted Shares	Weighted Average Grant Date Fair Value
Outstanding at March 31, 2023	7,658	$	13.01
Granted	18,267	7.72
Forfeited	(1,650)	10.49
Vested	(1,088)	14.64
Outstanding at September 30, 2023	23,187	$	8.96

The awards outstanding at September 30, 2023 in the table above includes 1.7 million and 0.9 million of performance-based restricted stock units that were awarded to certain executives and key employees under the 2005 Plan during the three months ended September 30, 2023 and Fiscal 2023, respectively. The performance-based restricted stock units awarded during the three months ended September 30, 2023 and Fiscal 2023 have a

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weighted average fair value of $6.92 and $9.13, respectively, and have vesting that is tied to the achievement of certain combined annual revenue and operating income targets.

The Company deemed the achievement of certain of the targets for the performance-based restricted stock units awarded during Fiscal 2023 to be improbable and recorded a reversal of previously recorded expense of $0.9 million during the three months ended September 30, 2023. Inclusive of this reversal, during the three and six months ended September 30, 2023, the Company recorded stock-based compensation expense of ($0.7) million and ($0.5) million, respectively, relating to these awards (three and six months ended September 30, 2022: $0.9 million and $1.3 million, respectively).

The Company deemed the achievement of the targets for the performance-based restricted stock units awarded during the three months ended September 30, 2023 to be probable and recorded stock-based compensation expense of $0.4 million related to these awards.

The Company assesses the probability of the achievement of the remaining revenue and operating income targets at the end of each reporting period and based on that assessment cumulative adjustments may be recorded in future periods.

NOTE 15. FAIR VALUE MEASUREMENTS

Fair value is defined as the price that would be received to sell an asset or the exit price that would be paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value accounting guidance outlines a valuation framework, creates a fair value hierarchy in order to increase the consistency and comparability of fair value measurements and the related disclosures, and prioritizes the inputs used in measuring fair value as follows:


Level 1:			Observable inputs such as quoted prices in active markets;

Level 2:			Inputs, other than quoted prices in active markets, that are observable either directly or indirectly; and

Level 3:			Unobservable inputs for which there is little or no market data, which require the reporting entity to develop its own assumptions.

Financial assets and liabilities measured at fair value on a recurring basis

The Company's financial assets (liabilities) measured at fair value on a recurring basis consisted of the following types of instruments as of the following periods:


	September 30, 2023						March 31, 2023
	Level 1		Level 2		Level 3		Level 1		Level 2		Level 3
Derivative foreign currency contracts (see Note 16)	$	—	$	18,235	$	—	$	—	$	(3,127)	$	—
TOLI policies held by the Rabbi Trust (see Note 13)	$	—	$	7,705	$	—	$	—	$	7,691	$	—
Deferred Compensation Plan obligations (see Note 13)	$	—	$	(14,340)	$	—	$	—	$	(14,082)	$	—

Fair values of the financial assets and liabilities listed above are determined using inputs that use as their basis readily observable market data that are actively quoted and are validated through external sources, including third-party pricing services and brokers. The foreign currency contracts represent unrealized gains and losses on derivative contracts, which is the net difference between the U.S. dollar value to be received or paid at the contracts' settlement date and the U.S. dollar value of the foreign currency to be sold or purchased at the current market exchange rate. The fair value of the TOLI policies held by the Rabbi Trust are based on the cash-surrender value of the life insurance policies, which are invested primarily in mutual funds and a separately managed fixed income fund. These investments are initially made in the same funds and purchased in substantially the same amounts as the selected investments of participants in the Deferred Compensation Plan, which represent the underlying liabilities to participants. Liabilities under the Deferred Compensation Plan are recorded at amounts due to participants, based on the fair value of participants' selected investments.

The fair value of long-term debt is estimated based upon quoted prices for similar instruments or quoted prices for identical instruments in inactive markets (Level 2).

As of September 30, 2023, the fair value of the Convertible Senior Notes was $80.1 million (March 31, 2023: $85.8 million).

As of September 30, 2023, the fair value of the Senior Notes was $540.0 million (March 31, 2023: $553.9 million).

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Assets and liabilities measured at fair value on a non-recurring basis

Certain assets are not remeasured to fair value on an ongoing basis but are subject to fair value adjustments only in certain circumstances. These assets can include long-lived assets and goodwill that have been reduced to fair value when impaired. Assets that are written down to fair value when impaired are not subsequently adjusted to fair value unless further impairment occurs.

NOTE 16. RISK MANAGEMENT AND DERIVATIVES

The Company is exposed to global market risks, including the effects of changes in foreign currency and interest rates. The Company uses derivative instruments to manage financial exposures that occur in the normal course of business and does not hold or issue derivatives for trading or speculative purposes.

The Company may elect to designate certain derivatives as hedging instruments under U.S. GAAP. The Company formally documents all relationships between designated hedging instruments and hedged items, as well as its risk management objectives and strategies for undertaking hedge transactions. This process includes linking all derivatives designated as hedges to forecasted cash flows and assessing, both at inception and on an ongoing basis, the effectiveness of the hedging relationships.

The Company's foreign exchange risk management program consists of designated cash flow hedges and undesignated hedges. As of September 30, 2023, the Company has hedge instruments primarily for:

•British Pound/U.S. Dollar;

•U.S. Dollar/Chinese Renminbi;

•Euro/U.S. Dollar;

•U.S. Dollar/Canadian Dollar;

•U.S. Dollar/Mexican Peso; and

•U.S. Dollar/Korean Won.

All derivatives are recognized on the Condensed Consolidated Balance Sheets at fair value and classified based on the instrument's maturity date.

The following table presents the fair values of derivative instruments within the Condensed Consolidated Balance Sheets. Refer to Note 15 of the Condensed Consolidated Financial Statements for a discussion of the fair value measurements.


	Balance Sheet Classification	September 30, 2023		March 31, 2023
Derivatives designated as hedging instruments under ASC 815
Foreign currency contracts	Other current assets	$	28,690	$	22,473
Foreign currency contracts	Other long-term assets	8,670		619
Total derivative assets designated as hedging instruments		$	37,360	$	23,092

Foreign currency contracts	Other current liabilities	$	17,215	$	21,622
Foreign currency contracts	Other long-term liabilities	382		5,769
Total derivative liabilities designated as hedging instruments		$	17,597	$	27,391

Derivatives not designated as hedging instruments under ASC 815
Foreign currency contracts	Other current assets	$	116	$	3,408
Total derivative assets not designated as hedging instruments		$	116	$	3,408

Foreign currency contracts	Other current liabilities	$	379	$	6,563
Foreign currency contracts	Other long-term liabilities	—		4
Total derivative liabilities not designated as hedging instruments		$	379

Under Armour, Inc. [UAA] Filings

Under Armour, Inc. [UA] Filings