10-Q

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, 2021

or

☐ 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) 454-6428
(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, 2021 there were 188,645,598 shares of Class A Common Stock, 34,450,000 shares of Class B Convertible Common Stock and 253,018,596 shares of Class C Common Stock outstanding.

UNDER ARMOUR, INC.

September 30, 2021

INDEX TO FORM 10-Q

 

PART I.	FINANCIAL INFORMATION
Item 1.	Financial Statements:
	Unaudited Condensed Consolidated Balance Sheets as of September 30, 2021, December 31, 2020 and September 30, 2020	1
	Unaudited Condensed Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2021 and 2020	2
	Unaudited Condensed Consolidated Statements of Comprehensive Income (Loss) for the Three and Nine Months Ended September 30, 2021 and 2020	3
	Unaudited Condensed Consolidated Statements of Stockholders' Equity for the Three and Nine Months Ended September 30, 2021 and 2020	4
	Unaudited Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2021 and 2020	6
	Notes to the Unaudited Condensed Consolidated Financial Statements	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	30
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	48
Item 4.	Controls and Procedures	49
PART II.	OTHER INFORMATION
Item 1.	Legal Proceedings	50
Item 1A.	Risk Factors	50
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	48
Item 6.	Exhibits	50
	SIGNATURES	51

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

Under Armour, Inc. and Subsidiaries

Unaudited Condensed Consolidated Balance Sheets

(In thousands, except share data)

	September 30, 2021		December 31, 2020		September 30, 2020
Assets
Current assets
Cash and cash equivalents	$	1,253,706	$	1,517,361	$	865,609
Accounts receivable, net	735,779		527,340		806,916
Inventories	837,740		895,974		1,056,845
Prepaid expenses and other current assets, net	300,719		282,300		243,971
Total current assets	3,127,944		3,222,975		2,973,341
Property and equipment, net	601,700		658,678		680,871
Operating lease right-of-use assets	469,638		536,660		560,146
Goodwill	498,166		502,214		493,631
Intangible assets, net	11,474		13,295		37,274
Deferred income taxes	34,543		23,930		45,995
Other long term assets	78,836		72,876		72,293
Total assets	$	4,822,301	$	5,030,628	$	4,863,551
Liabilities and Stockholders’ Equity
Current liabilities
Accounts payable	$	532,919	$	575,954	$	643,315
Accrued expenses	388,275		378,859		309,096
Customer refund liabilities	174,274		203,399		197,496
Operating lease liabilities	142,566		162,561		156,885
Other current liabilities	116,504		92,503		141,607
Total current liabilities	1,354,538		1,413,276		1,448,399
Long term debt, net of current maturities	662,903		1,003,556		997,347
Operating lease liabilities, non-current	728,077		839,414		872,791
Other long term liabilities	99,034		98,389		74,668
Total liabilities	2,844,552		3,354,635		3,393,205
Stockholders’ equity
Class A Common Stock, $0.0003 1/3 par value; 400,000,000 shares authorized as of September 30, 2021, December 31, 2020 and September 30, 2020; 188,645,131 shares issued and outstanding as of September 30, 2021 (December 31, 2020: 188,603,686, September 30, 2020:188,533,987)	63		62		62
Class B Convertible Common Stock, $0.0003 1/3 par value; 34,450,000 shares authorized, issued and outstanding as of September 30, 2021, December 31, 2020 and September 30, 2020.	11		11		11
Class C Common Stock, $0.0003 1/3 par value; 400,000,000 shares authorized as of September 30, 2021, December 31, 2020 and September 30, 2020; 252,992,053 shares issued and outstanding as of September 30, 2021 (December 31, 2020: 231,953,667, September 30, 2020: 231,684,883)	84		77		77
Additional paid-in capital	1,096,856		1,061,173		1,050,983
Retained earnings	918,664		673,855		490,071
Accumulated other comprehensive loss	(37,929)		(59,185)		(70,858)
Total stockholders’ equity	1,977,749		1,675,993		1,470,346
Total liabilities and stockholders’ equity	$	4,822,301	$	5,030,628	$	4,863,551

Commitments and contingencies (Note 6)

See accompanying notes.

1

Under Armour, Inc. and Subsidiaries

Unaudited Condensed Consolidated Statements of Operations

(In thousands, except per share amounts)

 

	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Net revenues	$	1,545,532	$	1,433,021	$	4,154,261	$	3,070,901
Cost of goods sold	757,428		746,701		2,068,695		1,604,428
Gross profit	788,104		686,320		2,085,566		1,466,473
Selling, general and administrative expenses	599,384		553,549		1,659,025		1,586,156
Restructuring and impairment charges	16,656		74,201		26,382		549,601
Income (loss) from operations	172,064		58,570		400,159		(669,284)
Interest income (expense), net	(9,261)		(14,955)		(36,705)		(32,251)
Other income (expense), net	(29,476)		(7,184)		(75,150)		(10,493)
Income (loss) before income taxes	133,327		36,431		288,304		(712,028)
Income tax expense (benefit)	18,962		(3,714)		38,870		14,696
Income (loss) from equity method investments	(921)		(1,199)		969		(6,906)
Net income (loss)	$	113,444	$	38,946	$	250,403	$	(733,630)
Basic net income (loss) per share of Class A, B and C common stock	$	0.24	$	0.09	$	0.54	$	(1.62)
Diluted net income (loss) per share of Class A, B and C common stock	$	0.24	$	0.09	$	0.54	$	(1.62)
Weighted average common shares outstanding Class A, B and C common stock
Basic	470,002		454,541		461,908		453,847
Diluted	473,116		456,674		464,918		453,847

See accompanying notes.

2

Under Armour, Inc. and Subsidiaries

Unaudited Condensed Consolidated Statements of Comprehensive Income (Loss)

(In thousands)

 

	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Net income (loss)	$	113,444	$	38,946	$	250,403	$	(733,630)
Other comprehensive income (loss):
Foreign currency translation adjustment	(7,499)		12,258		2,897		(28,785)
Unrealized gain (loss) on cash flow hedges, net of tax benefit (expense) of ($4,900) and $4,627 for the three months ended September 30, 2021 and 2020, respectively, and $(5,427) and $(3,850) for the nine months ended September 30, 2021 and 2020, respectively.	15,468		(18,498)		20,521		5,249
Gain (loss) on intra-entity foreign currency transactions	(2,295)		6,923		(2,162)		3,443
Total other comprehensive income (loss)	5,674		683		21,256		(20,093)
Comprehensive income (loss)	$	119,118	$	39,629	$	271,659	$	(753,723)

See accompanying notes.

3

Under Armour, Inc. and Subsidiaries

Unaudited Condensed Consolidated Statements of Stockholders' Equity

(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, 2020	188,461	$	62	34,450	$	11	231,354	$	77	$	1,044,055	$	450,750	$	(71,541)	$	1,423,414
Exercise of stock options	2	—		—	—		2	—		18		—		—		18
Shares withheld in consideration of employee tax obligations relative to stock-based compensation arrangements	—	—		—	—		(57)	—		—		375		—		375
Issuance of Class A Common Stock, net of forfeitures	71	—		—	—		—	—		—		—		—		—
Issuance of Class C Common Stock, net of forfeitures	—	—		—	—		386	—		978		—		—		978
Stock-based compensation expense	—	—		—	—		—	—		9,513		—		—		9,513
Equity Component value of convertible note issuance, net	—	—		—	—		—	—		(3,581)		—		—		(3,581)
Comprehensive income (loss)	—	—		—	—		—	—		—		38,946		683		39,629
Balance as of September 30, 2020	188,534	$	62	34,450	$	11	231,685	$	77	$	1,050,983	$	490,071	$	(70,858)	$	1,470,346
Balance as of December 31, 2019	188,290	$	62	34,450	$	11	229,028	$	76	$	973,717	$	1,226,986	$	(50,765)	$	2,150,087
Exercise of stock options	147	—		—	—		135	—		517		—		—		517
Shares withheld in consideration of employee tax obligations relative to stock-based compensation arrangements	(1)	—		—	—		(233)	—		—		(3,285)		—		(3,285)
Issuance of Class A Common Stock, net of forfeitures	98	—		—	—		—	—		—		—		—		—
Issuance of Class C Common Stock, net of forfeitures	—	—		—	—		2,755	1		3,637		—		—		3,638
Stock-based compensation expense	—	—		—	—		—	—		32,770		—		—		32,770
Equity Component value of convertible note issuance, net	—	—		—	—		—	—		40,342		—		—		40,342
Comprehensive income (loss)	—	—		—	—		—	—		—		(733,630)		(20,093)		(753,723)
Balance as of September 30, 2020	188,534	$	62	34,450	$	11	231,685	$	77	$	1,050,983	$	490,071	$	(70,858)	$	1,470,346

See accompanying notes.

4

Under Armour, Inc. and Subsidiaries

Unaudited Condensed Consolidated Statements of Stockholders' Equity

(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, 2021	188,625	$	63	34,450	$	11	245,144	$	81	$	1,084,018	$	806,140	$	(43,603)	$	1,846,710
Shares withheld in consideration of employee tax obligations relative to stock-based compensation arrangements	—	—		—	—		(52)	—		—		(920)		—		(920)
Issuance of Class A Common Stock, net of forfeitures	20	—		—	—		—	—		—		—		—		—
Issuance of Class C Common Stock, net of forfeitures	—	—		—	—		7,900	3		1,790		—		—		1,793
Stock-based compensation expense	—	—		—	—		—	—		11,048		—		—		11,048
Comprehensive income (loss)	—	—		—	—		—	—		—		113,444		5,674		119,118
Balance as of September 30, 2021	188,645	$	63	34,450	$	11	252,992	$	84	$	1,096,856	$	918,664	$	(37,929)	$	1,977,749
Balance as of December 31, 2020	188,603	62		34,450	11		231,954	77		1,061,173		673,855		(59,185)		1,675,993
Exercise of stock options	6	1		—	—		7	—		23		—		—		24
Shares withheld in consideration of employee tax obligations relative to stock-based compensation arrangements	—	—		—	—		(291)	—		—		(5,594)		—		(5,594)
Issuance of Class A Common Stock, net of forfeitures	36	—		—	—		—	—		—		—		—		—
Issuance of Class C Common Stock, net of forfeitures	—	—		—	—		21,322	7		2,708		—		—		2,715
Stock-based compensation expense	—	—		—	—		—	—		32,952		—		—		32,952
Comprehensive income (loss)	—	—		—	—		—	—		—		250,403		21,256		271,659
Balance as of September 30, 2021	188,645	$	63	34,450	$	11	252,992	$	84	$	1,096,856	$	918,664	$	(37,929)	$	1,977,749

See accompanying notes.

5

Under Armour, Inc. and Subsidiaries`

Unaudited Condensed Consolidated Statements of Cash Flows

(In thousands)

	Nine Months Ended September 30,
	2021		2020
Cash flows from operating activities
Net income (loss)	$	250,403	$	(733,630)
Adjustments to reconcile net income (loss) to net cash used in operating activities
Depreciation and amortization	107,847		124,169
Unrealized foreign currency exchange rate gain (loss)	12,353		(3,676)
Loss on extinguishment of senior convertible notes	58,526		—
Loss on disposal of property and equipment	2,624		3,547
Non-cash restructuring and impairment charges	11,903		452,945
Amortization of bond premium	19,902		6,910
Stock-based compensation	32,953		32,770
Deferred income taxes	(23,414)		19,172
Changes in reserves and allowances	(19,215)		22,910
Changes in operating assets and liabilities:
Accounts receivable	(200,079)		(105,874)
Inventories	64,202		(159,930)
Prepaid expenses and other assets	(3,738)		64,404
Other non-current assets	52,179		(288,111)
Accounts payable	(36,913)		17,972
Accrued expenses and other liabilities	(123,273)		301,720
Customer refund liability	(29,072)		(23,164)
Income taxes payable and receivable	32,680		18,159
Net cash provided by (used in) operating activities	209,868		(249,707)
Cash flows from investing activities
Purchases of property and equipment	(57,660)		(71,639)
Sale of property and equipment	1,413		—
Purchase of businesses	—		(38,848)
Net cash used in investing activities	(56,247)		(110,487)
Cash flows from financing activities
Proceeds from long term debt and revolving credit facility	—		1,288,753
Payments on long term debt and revolving credit facility	(506,280)		(800,000)
Proceeds from capped call	91,722		—
Purchase of capped call	—		(47,850)
Employee taxes paid for shares withheld for income taxes	(5,623)		(3,285)
Proceeds from exercise of stock options and other stock issuances	2,739		3,855
Payments of debt financing costs	—		(5,150)
Net cash provided by (used in) financing activities	(417,442)		436,323
Effect of exchange rate changes on cash, cash equivalents and restricted cash	1,708		2,398
Net increase in (decrease in) cash, cash equivalents and restricted cash	(262,113)		78,527
Cash, cash equivalents and restricted cash
Beginning of period	1,528,515		796,008
End of period	$	1,266,402	$	874,535
Non-cash investing and financing activities
Change in accrual for property and equipment	$	(4,704)	$	(12,449)

See accompanying notes.

6

Under Armour, Inc. and Subsidiaries

Notes to the Unaudited Condensed Consolidated Financial Statements

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 solve problems and make athletes better. The Company's products are made, sold, and worn worldwide.

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements 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. These unaudited condensed consolidated financial statements are presented in U.S. Dollars. 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. The unaudited condensed consolidated balance sheet as of September 30, 2021 is derived from the audited financial statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020 ("Fiscal 2020"), filed with the SEC on February 24, 2021 ("Annual Report on Form 10-K for Fiscal 2020"), which should be read in conjunction with these unaudited condensed consolidated financial statements. The unaudited results for the three and nine months ended September 30, 2021, are not necessarily indicative of the results to be expected for the fiscal year ending December 31, 2021 ("Fiscal 2021"), or any other portions thereof.

Connected Fitness

Prior to January 1, 2021, the Company's previously reported "Connected Fitness" segment was composed of digital subscription and advertising conducted through various platforms, predominantly the MyFitnessPal, MapMyFitness, consisting of applications such as MapMyRun and MapMyRide (collectively "MMR"), and Endomondo platforms. While the Company continues to operate the MMR platforms, MyFitnessPal was sold in December 2020 and Endomondo was wound down in December 2020 as part of the Company's 2020 restructuring plan. As a result of these changes, beginning in the first quarter of Fiscal 2021, the Company no longer reports Connected Fitness as a discrete reportable segment. The operating results of MMR are now included within the Company’s Corporate Other segment. Where applicable, all prior periods that used to separately reflect financial information about the Connected Fitness business have been recast to be included within the Corporate Other reportable segment, in order to conform with current period presentation. Such reclassifications did not affect total consolidated net revenues, consolidated income from operations or consolidated net income.

Management Estimates and COVID-19 Update

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.

Further, COVID-19 continues to significantly impact the global economy. As the impacts of the pandemic 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 pandemic impacts 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 COVID-19 and the actions that governments around the world may take to contain the virus or treat its impact. 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

7

Company operates. Please see the risk factors discussed in Part I, Item 1A "Risk Factors" in the Company's Annual Report on Form 10-K for Fiscal 2020.

NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Cash, Cash Equivalents and Restricted Cash

The Company considers all highly liquid investments with an original maturity of three months or less at the date of purchase to be cash and cash equivalents. The Company's restricted cash is reserved for payments related to claims for its captive insurance program, which is included in prepaid expenses and other current assets on the Company's unaudited condensed consolidated balance sheets.

The following table provides a reconciliation of cash, cash equivalents and restricted cash to the balances shown in the unaudited condensed consolidated statements of cash flows:

(In thousands)	September 30, 2021		December 31, 2020		September 30, 2020
Cash and cash equivalents	$	1,253,706	$	1,517,361	$	865,609
Restricted cash	12,696		11,154		8,926
Total cash, cash equivalents and restricted cash	$	1,266,402	$	1,528,515	$	874,535

Concentration of Credit Risk

Financial instruments that subject the Company to significant concentration of credit risk consist primarily of accounts receivable. The majority of the Company’s accounts receivable is due from large wholesale customers. One of the Company's customers accounted for more than 10.0% of the accounts receivable balance as of September 30, 2021. None of the Company's customers accounted for more than 10% of the accounts receivable balance as of December 31, 2020 and September 30, 2020, respectively. For the three and nine months ended September 30, 2021, one customer in North America accounted for more than 10% of the Company's net revenues. For the three and nine months ended September 30, 2020, no customer accounted for more than 10% of the Company's net revenues. The Company regularly evaluates the credit risk of the large wholesale customers which make up the majority of the Company's accounts receivable. Refer to the "Credit Losses - Allowance for Doubtful Accounts" below for a discussion of the evaluation of credit losses.

Credit Losses - Allowance for Doubtful Accounts

Credit losses are the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations. The Company is exposed to credit losses primarily through customer receivables associated with the sale of products within the Company's wholesale channels, recorded within accounts receivable, net on the Company's unaudited condensed consolidated balance sheet. The Company also has other receivables, including receivables from licensing arrangements recorded in prepaid expenses and other current assets on the Company's unaudited condensed consolidated balance sheet.

Credit is extended to customers based on a credit review. The credit review considers each customer’s financial condition, including a review of the customers established credit rating or, if an established customer rating is not available, then the Company's assessment of the customer’s creditworthiness is based on their financial statements, local industry practices, and business strategy. A credit limit and terms of credit are established for each customer based on the outcome of this review. The Company actively monitors ongoing credit exposure through review of customer balances against terms and payments against due dates. To mitigate credit risk, the Company may require customers to provide security in the form of guarantees, letters of credit, or prepayment. The Company is also exposed to credit losses through credit card receivables associated with the sale of products within the Company's direct-to-consumer channel.

The allowance for doubtful accounts is based on the Company’s assessment of the collectibility of customer accounts. The Company makes ongoing estimates relating to the collectibility of accounts receivable and records an allowance for estimated losses expected from the inability of its customers to make required payments. The Company establishes expected credit losses by evaluating historical levels of credit losses, current economic conditions that may affect a customer’s ability to pay, and creditworthiness of significant customers. These inputs are used to determine a range of expected credit losses and an allowance is recorded within the range. Accounts receivable are written off when there is no reasonable expectation of recovery.

8

The following table illustrates the activity in the Company's allowance for doubtful accounts:

(In thousands)	Balance as of December 31, 2020		Increases (decreases) to Costs and Expenses		Write-Offs Net of Recoveries		Balance as of September 30, 2021
Allowance for doubtful accounts - within accounts receivable, net	$	20,350	$	(4,149)	$	(2,100)	$	14,101
Allowance for doubtful accounts - within prepaid expenses and other current assets	$	7,029	$	—	$	—	$	7,029

The allowance for doubtful accounts was established with information available as of September 30, 2021, including reasonable and supportable estimates of future risk.

Revenue Recognition

The Company recognizes revenue pursuant to Accounting Standards Codification 606 ("ASC 606"). Net revenues consist of net sales of apparel, footwear and accessories, license revenues and revenues from digital subscriptions and advertising.

The Company recognizes revenue when it satisfies its performance obligations by transferring control of promised products or services to its customers, which occurs either at a point in time or over time, depending on when the customer obtains the ability to direct the use of and obtain substantially all of the remaining benefits from the products or services. The amount of revenue recognized considers terms of sale that create variability in the amount of consideration that the Company ultimately expects to be entitled to in exchange for the products or services and is subject to an overall constraint that a significant revenue reversal will not occur in future periods. Sales taxes imposed on the Company’s revenues from product sales are presented on a net basis on the unaudited condensed consolidated statements of operations, and therefore do not impact net revenues or costs of goods sold.

Revenue transactions associated with the sale of apparel, footwear, and accessories, comprise a single performance obligation, which consists of the sale of products to customers either through wholesale or direct-to-consumer channels. The Company satisfies the performance obligation and records revenues when transfer of control has passed to the customer, based on the terms of sale. In the Company’s wholesale channel, transfer of control is based upon shipment under free on board shipping point for most goods or upon receipt by the customer depending on the country of the sale and the agreement with the customer. The Company may also ship product directly from its supplier to wholesale customers and recognize revenue when the product is delivered to and accepted by the customer. In the Company’s direct-to-consumer channel, transfer of control takes place at the point of sale for brand and factory house customers and upon shipment to substantially all e-commerce customers. Payment terms for wholesale transactions are established in accordance with local and industry practices. Payment is generally required within 30 to 60 days of shipment to or receipt by the wholesale customer in the United States, and generally within 60 to 90 days of shipment to or receipt by the wholesale customer internationally. Payment is generally due at the time of sale for direct-to-consumer transactions.

Gift cards issued to customers by the Company are recorded as contract liabilities until they are redeemed, at which point revenue is recognized. The Company also estimates and recognizes revenue for gift card balances not expected to ever be redeemed ("breakage") to the extent that it does not have a legal obligation to remit the value of such unredeemed gift cards to the relevant jurisdiction as unclaimed or abandoned property. Such estimates are based upon historical redemption trends, with breakage income recognized in proportion to the pattern of actual customer redemptions.

Revenue from the Company's licensing arrangements is recognized over time during the period that licensees are provided access to the Company's trademarks and benefit from such access through their sales of licensed products. These arrangements require licensees to pay a sales-based royalty, which for most arrangements may be subject to a contractually guaranteed minimum royalty amount. Payments are generally due quarterly. The Company recognizes revenue for sales-based royalty arrangements (including those for which the royalty exceeds any contractually guaranteed minimum royalty amount) as licensed products are sold by the licensee. If a sales-based royalty is not ultimately expected to exceed a contractually guaranteed minimum royalty amount, the minimum is recognized as revenue over the contractual period, if all other criteria of revenue recognition have been met. This sales-based output measure of progress and pattern of recognition best represents the value transferred to the licensee over the term of the arrangement, as well as the amount of consideration that the Company is entitled to receive in exchange for providing access to its trademarks.

Revenue from digital subscriptions is recognized on a gross basis and is recognized over the term of the subscription. The Company receives payments in advance of revenue recognition for subscriptions and these

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payments are recorded as contract liabilities in the Company's unaudited condensed consolidated balance sheet. Related commission cost is included in selling, general and administrative expense in the unaudited condensed consolidated statement of operations. Revenue from digital advertising is recognized as the Company satisfies performance obligations pursuant to customer insertion orders.

The Company records reductions to revenue for estimated customer returns, allowances, markdowns, and discounts. The Company bases its estimates on historical rates of customer returns and allowances as well as the specific identification of outstanding returns, markdowns and allowances that have not yet been received by the Company. The actual amount of customer returns and allowances, which is inherently uncertain, may differ from the Company’s estimates. If the Company determines that actual or expected returns or allowances are significantly higher or lower than the reserves it established, it would record a reduction or increase, as appropriate, to net sales in the period in which it makes such a determination. Provisions for customer specific discounts are based on negotiated arrangements with certain major customers. Reserves for returns, allowances, markdowns, and discounts are included within customer refund liability and the value of inventory associated with reserves for sales returns are included within prepaid expenses and other current assets on the unaudited condensed consolidated balance sheet. At a minimum, the Company reviews and refines these estimates on a quarterly basis.

The following table presents the customer refund liability, as well as the associated value of inventory for the periods indicated:

(In thousands)	Balance as of September 30, 2021		Balance as of December 31, 2020		Balance as of September 30, 2020
Customer refund liability	$	174,274	$	203,399	$	197,496
Inventory associated with the reserves	$	50,544	$	57,867	$	50,779

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, included in other current and other long-term liabilities, and gift cards, included in accrued expenses, on the Company's unaudited condensed consolidated balance sheets. As of September 30, 2021, December 31, 2020, and September 30, 2020, contract liabilities were $24.3 million, $26.7 million and $64.9 million, respectively.

For the three and nine months ended September 30, 2021, the Company recognized $3.1 million and $10.8 million, respectively, of revenue that was previously included in contract liabilities as of December 31, 2020. For the three and nine months ended September 30, 2020, the Company recognized $9.9 million and $21.2 million, respectively, of revenue that was previously included in contract liabilities as of December 31, 2019. 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. Commissions related to subscription revenue are capitalized and recognized over the subscription period.

Shipping and Handling Costs

The Company charges customers shipping and handling fees based on contractual terms, which are recorded in net revenues. The Company incurs freight costs associated with shipping goods to customers. These costs are recorded as a component of cost of goods sold.

The Company also incurs outbound handling costs associated with preparing goods to ship to customers and certain costs to operate the Company’s distribution facilities. These costs are recorded as a component of selling, general and administrative expenses. For the three and nine months ended September 30, 2021, these costs totaled $13.8 million and $63.3 million, respectively, (three and nine months ended September 30, 2020 - $21.2 million and $61.2 million, respectively).

Equity Method Investment

The Company has a common stock investment of 29.5% in Dome Corporation ("Dome"), the Company's Japanese licensee. The Company accounts for its investment in Dome under the equity method, given it has the ability to exercise significant influence, but not control, over Dome. The Company recorded its allocable share of Dome’s net income (loss) of $0 and $1.8 million for the three and nine months ended September 30, 2021, respectively, (three and nine months ended September 30, 2020 - $0 and $(1.4) million, respectively) within income

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(loss) from equity method investment on the unaudited condensed consolidated statements of operations and as an adjustment to the invested balance within other long term assets on the unaudited condensed consolidated balance sheets. As of September 30, 2021, the carrying value of the Company's investment in Dome was $1.8 million. The Company's investment in Dome had no carrying value as of December 31, 2020 and September 30, 2020.

In addition to the investment in Dome, the Company has a license agreement with Dome. The Company recorded license revenues from Dome of $11.1 million and $22.9 million for the three and nine months ended September 30, 2021, respectively (three and nine months ended September 30, 2020 - $10.9 million and $17.4 million, respectively). As of September 30, 2021, December 31, 2020, and September 30, 2020, the Company had $8.9 million, $22.9 million, and $8.5 million, respectively, in licensing receivables outstanding, recorded in the prepaid expenses and other current assets line item within the Company's unaudited condensed consolidated balance sheets.

On March 2, 2020, as part of the Company's acquisition of Triple Pte. Ltd., the Company assumed 49.5% of common stock ownership in UA Sports (Thailand) Co., Ltd. (“UA Sports Thailand”). The Company accounts for its investment in UA Sports Thailand under the equity method, given it has the ability to exercise significant influence, but not control, over UA Sports Thailand. For the three and nine months ended September 30, 2021, the Company recorded the allocable share of UA Sports Thailand’s net income (loss) of $(921) thousand and $(873) thousand, respectively (three and nine months ended September 30, 2020 - $1.2 million and $1.8 million, respectively) within income (loss) from equity method investment on the unaudited condensed consolidated statements of operations and as an adjustment to the invested balance within other long term assets on the unaudited condensed consolidated balance sheets. As of September 30, 2021, December 31, 2020, and September 30, 2020, the carrying value of the Company’s investment in UA Sports Thailand was $4.7 million, $4.5 million and $3.7 million, respectively.

Recently Issued Accounting Standards

In August 2020, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2020-06 "Debt - Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity's Own Equity (Subtopic 815-40)" ("ASU 2020-06"). The amendment in this update simplifies the accounting for convertible instruments by reducing the number of accounting models available for convertible debt instruments and convertible preferred stock. This update also amends the guidance for the derivatives scope exception for contracts in an entity's own equity to reduce form-over-substance-based accounting conclusions and requires the application of the if-converted method for calculating diluted earnings per share. The update also requires entities to provide expanded disclosures about the terms and features of convertible instruments, how the instruments have been reported in the entity’s financial statements, and information about events, conditions, and circumstances that can affect how to assess the amount or timing of an entity’s future cash flows related to those instruments. The guidance is effective for interim and annual periods beginning after December 15, 2021. The Company currently does not expect this guidance to have a material impact on its unaudited condensed consolidated financial statements.

In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of Effects of Reference Rate Reform on Financial Reporting and then issued a subsequent amendment to the initial guidance under ASU 2021-01 (collectively Topic 848). Topic 848 provides practical expedients and exceptions for applying GAAP to contracts, hedging relationships, derivatives and other transactions affected by reference rate reform if certain criteria are met. The expedients and exceptions provided by the amendments in this update apply only to contracts, hedging relationships, derivatives and other transactions that reference the London interbank offered rate (“LIBOR”) or another reference rate expected to be discontinued as a result of reference rate reform. The Company adopted Topic 848 in the third quarter of Fiscal 2021. The adoption did not have an impact to the Company's unaudited condensed consolidated financial statements.

NOTE 3. RESTRUCTURING AND RELATED IMPAIRMENT CHARGES

During Fiscal 2020, the Company's Board of Directors approved a restructuring plan ranging between $550 million to $600 million in costs (the "2020 restructuring plan") designed to rebalance the Company’s cost base to further improve profitability and cash flow generation.

Restructuring and related impairment charges and recoveries require the Company to make certain judgments and estimates regarding the amount and timing as to when these charges or recoveries occur. The estimated liability could change subsequent to its recognition, requiring adjustments to the expense and the liability recorded. On a quarterly basis, the Company conducts an evaluation of the related liabilities and expenses and revises its assumptions and estimates as appropriate, as new or updated information becomes available. As of September 30,

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2021, the Company currently estimates total restructuring and related charges associated with the 2020 restructuring plan will range between $525 million to $575 million.

The restructuring and related charges primarily consist of approximately:

•$199 million of cash restructuring charges, of which approximately $28 million relates to employee severance and benefit costs, $14 million relates to facility and lease termination costs and $157 million relates to contract termination and other restructuring costs; and

•$376 million of non-cash charges, of which approximately $291 million relates to an impairment charge on the Company’s New York City flagship store and $85 million relates to intangibles and other asset related impairments.

The Company recorded $16.8 million and $26.9 million of restructuring and related impairment charges for the three and nine months ended September 30, 2021, respectively, and $70.2 million and $410.3 million for the three and nine months ended September 30, 2020, respectively, under the 2020 restructuring plan. As of September 30, 2021, $499.6 million of restructuring and related impairment charges under the 2020 restructuring plan have been recorded to date since the inception of the plan.

The following table illustrates the costs recorded during the three and nine months ended September 30, 2021, as well as the Company's current estimates of the amount expected to be incurred in connection with the 2020 restructuring plan:

	Restructuring and Impairment Charges Recorded								Estimated Restructuring and Impairment Charges (1)
(In thousands)	Three months ended September 30,				Nine months ended September 30,				Remaining to be Incurred		Total to be Incurred under plan
	2021		2020		2021		2020
Costs recorded in cost of goods sold:
Contract-based royalties	$	—	$	—	$	—	$	—	$	—	$	11,608
Inventory write-offs	107		—		515		—		1,000		2,283
Total costs recorded in cost of goods sold	107		—		515		—		1,000		13,891
Net costs (recoveries) recorded in restructuring and related impairment charges:
Property and equipment impairment	3,064		3,307		3,064		26,211		—		32,344
Intangible asset impairment	—		—		—		—		—		4,351
Right-of-use asset impairment	—		—		—		290,813		—		293,495
Employee related costs	(424)		26,410		(845)		27,239		—		27,734
Contract exit costs (2)	10,794		38,520		15,041		53,462		58,999		153,048
Other asset write off	1,055		—		2,400		—		7,349		22,823
Other restructuring costs	2,167		1,995		6,722		12,533		8,028		27,314
Total costs recorded in restructuring and impairment charges	16,656		70,232		26,382		410,258		74,376		561,109
Total restructuring and impairment charges	$	16,763	$	70,232	$	26,897	$	410,258	$	75,376	$	575,000

(1) Estimated restructuring and impairment charges reflect the high-end of the range of the estimated charges expected by the Company in connection with the 2020 restructuring plan.

(2) Contract exit costs primarily consist of proposed lease exits of certain brand and factory house stores and office facilities, and proposed marketing and other contract exits.

All restructuring and related impairment charges are included in the Company's Corporate Other segment.

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For the three months ended September 30, 2021, approximately $10.5 million of the charges are North America related, $5.9 million are Latin America related and $1.4 million are Asia-Pacific related. These charges were offset by a recovery of $1.1 million related to EMEA.

For the three months ended September 30, 2020, approximately $39.1 million of the charges are North America related, $11.5 million are EMEA related, $6.1 million are Latin America related, and $3.6 million are Asia-Pacific related.

For the nine months ended September 30, 2021, approximately $16.7 million of the charges are North America related, $9.2 million are Latin America related and $2.1 million are Asia-Pacific related. These charges were offset by a recovery of $1.1 million related to EMEA.

For the nine months ended September 30, 2020, approximately $367.4 million of the charges are North America related, $11.6 million are EMEA related, $6.4 million are Latin America related and $3.6 million are Asia-Pacific related.

A summary of the activity in the restructuring reserve related to the Company's 2020 restructuring plan, as well as prior restructuring plans in 2018 and 2017 are as follows:

(In thousands)	Employee Related Costs		Contract Exit Costs		Other Restructuring Related Costs
Balance at January 1, 2021	$	12,868	$	61,642	$	6,098
Net additions (recoveries) charged to expense	(845)		17,814		(872)
Cash payments charged against reserve	(5,471)		(45,378)		(6,078)
Foreign exchange and other	(1,086)		(1,443)		140
Balance at September 30, 2021	$	5,466	$	32,635	$	(712)

During the three and nine months ended September 30, 2021, the Company also incurred net costs of $6.4 million and $10.3 million, respectively, associated with abandoned facilities and the write off of fixed assets under the 2020 restructuring plan.

NOTE 4. 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 2035, excluding extensions at the Company's option, and include provisions for rental adjustments.

The Company accounts for a contract as a lease when it has the right to direct the use of the asset for a period of time while obtaining substantially all of the asset’s economic benefits. The Company determines the initial classification and measurement of its right-of-use ("ROU") assets and lease liabilities at the lease commencement date and thereafter if modified. ROU assets represent the Company’s right to control the underlying assets under lease, over the contractual term. ROU assets and lease liabilities are recognized on the unaudited condensed consolidated balance sheets based on the present value of future minimum lease payments to be made over the lease term. ROU assets and lease liabilities are established on the Company's unaudited condensed consolidated balance sheets for leases with an expected term greater than one year. Short-term lease payments were not material for the three and nine months ended September 30, 2021 and 2020.

As the rate implicit in a lease is not readily determinable, the Company uses its secured incremental borrowing rate to determine the present value of the lease payments. The Company calculates the incremental borrowing rate based on the current market yield curve and adjusts for foreign currency impacts for international leases.

Fixed lease costs are included in the recognition of ROU assets and lease liabilities. Variable lease costs are not included in the measurement of the lease liability. These variable lease payments are recognized in the unaudited condensed consolidated statements of operations in the period in which the obligation for those payments is incurred. Variable lease payments primarily consist of payments dependent on sales in brand and factory house stores. The Company has elected to combine lease and non-lease components in the determination of lease costs for its leases. The lease liability includes lease payments related to options to extend or renew the lease term only if the Company is reasonably certain to exercise those options.

As a result of the impacts of COVID-19, the Company sought concessions during Fiscal 2020 from landlords for certain leases of brand and factory house stores in the form of rent deferrals or rent waivers. Consistent with

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updated guidance from the FASB in April 2020, the Company elected to account for treating these concessions as though the enforceable rights and obligations to the deferrals existed in the respective contracts at lease inception and will not account for the concessions as lease modifications, unless the concession results in a substantial change in the Company's obligations.

The Company's rent deferrals had no impact to rent expense during the three and nine months ended September 30, 2021 and 2020, and amounts deferred and payable in future periods have been included in short term lease liability on the Company's unaudited condensed consolidated balance sheet as of September 30, 2021. The Company's rent waivers, which were recorded as a reduction of rent expense, were approximately $2.2 million and $5.1 million for the three and nine months ended September 30, 2021, respectively, and $1.0 million and $3.4 million for the three and nine months ended September 30, 2020, respectively.

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 unaudited condensed consolidated statement of operations, for the periods indicated:

	Three months ended September 30,				Nine months ended September 30,
(In thousands)	2021		2020		2021		2020
Operating lease costs	$	35,630	$	36,882	$	106,973	$	108,614
Variable lease costs	$	4,650	$	2,879	$	12,025	$	5,447

There are no residual value guarantees that exist, and there are no restrictions or covenants imposed by leases. The Company rents or subleases 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:

	September 30, 2021		December 31, 2020		September 30, 2020
Weighted average remaining lease term (in years)	8.84		9.12		9.24
Weighted average discount rate	3.73	%	3.83	%	3.82	%

Supplemental Cash Flow Information

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

	Three months ended September 30,				Nine months ended September 30,
(In thousands)	2021		2020		2021		2020
Cash paid for amounts included in the measurement of lease liabilities
Operating cash outflows from operating leases	$	44,161	$	37,810	$	135,035	$	113,784
Leased assets obtained in exchange for new operating lease liabilities	$	5,348	$	11,018	$	18,396	$	393,850

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Maturity of Lease Liabilities

The following table presents the future minimum lease payments under our operating lease liabilities as of September 30, 2021:

(In thousands)
Fiscal year ending December 31,
2021 (three months ended)	$	49,090
2022	164,404
2023	144,415
2024	124,609
2025	95,162
2026 and thereafter	453,252
Total lease payments	$	1,030,932
Less: Interest	160,289
Total present value of lease liabilities	$	870,643

As of September 30, 2021, the Company has additional operating lease obligations that have not yet commenced of approximately $12.2 million, which are not reflected in the table above.

NOTE 5. CREDIT FACILITY AND OTHER LONG TERM DEBT

The Company's outstanding debt consisted of the following:

(In thousands)	As of September 30, 2021		As of December 31, 2020		As of September 30, 2020
1.50% Convertible Senior Notes due 2024	$	80,919	$	500,000	$	500,000
3.25% Senior Notes due 2026	600,000		600,000		600,000
Credit Facility borrowings	—		—		—
Total principal payments due	680,919		1,100,000		1,100,000
Unamortized debt discount on Convertible Senior Notes	(10,105)		(79,031)		(84,127)
Unamortized debt discount on Senior Notes	(1,194)		(1,385)		(1,448)
Unamortized debt issuance costs - Convertible Senior Notes	(1,086)		(8,763)		(9,403)
Unamortized debt issuance costs - Senior Notes	(2,536)		(2,940)		(3,074)
Unamortized debt issuance costs - Credit facility	(3,095)		(4,325)		(4,601)
Total amount outstanding	662,903		1,003,556		997,347
Less:
Current portion of long-term debt:
Credit Facility borrowings	—		—		—
Non-current portion of long-term debt	$	662,903	$	1,003,556	$	997,347

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”). The credit agreement has a term of five years, maturing in March 2024, with permitted extensions under certain circumstances. In May 2020, the Company entered into an amendment to the credit agreement (the “first amendment”), pursuant to which the prior revolving credit commitments were reduced from $1.25 billion to $1.1 billion of borrowings. Subsequently, in May 2021, the Company entered into a second amendment to the credit agreement (the "second amendment" and, the credit agreement as amended by the first amendment and the second amendment, the "amended credit agreement" or the "revolving credit facility"). The second amendment provides for certain changes to the Company's covenants and decreases to certain applicable

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rates effected by the first amendment. Where the first amendment previously provided for suspensions of and adjustments to the Company's existing interest coverage covenant and leverage covenant (each as defined below), and further required the Company to maintain a specific amount of minimum liquidity during certain quarters, the second amendment provided that these financial covenants became effective again as of March 31, 2021 and removed the minimum liquidity covenant. The second amendment also (i) decreases the interest rate margins that were previously provided for under the first amendment; (ii) reverses limitations effected by the first amendment on expansions of and extensions of the maturity of the revolving credit facility during the covenant suspension period; (iii) removes additional limitations on the availability of certain exceptions to the negative covenants, including the restricted payments covenant, that were imposed during the covenant suspension period; and (iv) provides mechanics relating to a transition away from LIBOR as a benchmark interest rate and the replacement of LIBOR by a replacement alternative benchmark rate or mechanism for loans made in U.S. Dollars and non-U.S. Dollar currencies.

As of September 30, 2021, December 31, 2020 and September 30, 2020 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, 2021, there was $4.4 million of letters of credit outstanding (December 31, 2020 and September 30, 2020 had $4.3 million and $15.5 million letters of credit outstanding, respectively).

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 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 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, 2021, 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.

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, (b) a rate based on the rates applicable for deposits in the interbank market for U.S. Dollars (“adjusted LIBOR”), (c) a rate based on the rates applicable for deposits in the interbank market for Japanese Yen ("adjusted TIBOR"), (d) a rate based on the rates applicable for deposits in the interbank market for Canadian Dollars ("adjusted CDOR"), or (e) a rate based on the rates applicable for deposits in the interbank market for Euro ("adjusted EURIBOR"), 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 1.25% to 1.75% for adjusted LIBOR, adjusted TIBOR, adjusted CDOR and adjusted EURIBOR loans and 0.25% to 0.75% for alternate base rate loans. 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.

The weighted average interest rate under the revolving credit facility borrowings was 2.1% and 2.3% during the three and nine months ended September 30, 2020, respectively. There were no borrowings outstanding during the nine months ended September 30, 2021. As of September 30, 2021, the commitment fee was 25.0 basis points.

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1.50% Convertible Senior Notes

In May 2020, the Company issued $500.0 million aggregate principal amount of 1.50% convertible senior notes due 2024 (the “Convertible Senior Notes”). The Convertible Senior Notes bear interest at the 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 net proceeds from the offering (including the net proceeds from the exercise of the over-allotment option) was $488.8 million, after deducting the initial purchasers’ discount and estimated offering expenses paid by the Company, of which the Company used $47.9 million to pay the cost of the capped call transactions described below. The Company utilized $439.9 million to repay indebtedness that was outstanding under its revolving credit facility at the time, and to pay related fees and expenses.

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.

In May 2021, the Company entered into exchange agreements with certain holders of the Convertible Senior Notes (the "first exchanging holders"), who agreed to exchange $250.0 million in aggregate principal amount of the Convertible Senior Notes for cash and/or shares of the Company's Class C Common Stock, plus payment for accrued and unpaid interest (the "First Exchange"). In connection with the First Exchange, the Company paid approximately $300.0 million cash and issued approximately 11.1 million shares of the Company's Class C Common Stock to the first exchanging holders. In August 2021, the Company entered into additional exchange agreements with certain holders of the Convertible Senior Notes (the "second exchanging holders"), who agreed to exchange approximately $169.1 million in aggregate principal amount of the Convertible Senior Notes for cash and/or shares of the Company's Class C Common Stock, plus payment for accrued an unpaid interest (the "Second Exchange" and, together with the First Exchange, the "Exchanges"). In connection with the Second Exchange, the Company paid approximately $207.0 million cash and issued approximately 7.7 million shares of the Company's Class C Common Stock to the second exchanging holders. In connection with the Exchanges, the Company recognized a loss on debt extinguishment of approximately $23.8 million and $58.5 million for the three and nine months ended September 30, 2021, respectively, which has been recorded within Other Income (Expense), net on the Company's unaudited condensed consolidated statement of operations. Following the Exchanges, approximately $80.9 million aggregate principal amount of the Convertible Senior Notes remain outstanding.

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 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.

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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.

On or after 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.

In May 2021 and August 2021, concurrently with the Exchanges, the Company entered into, with each of the option counterparties, termination agreements relating to a number of options corresponding to the number of Convertible Senior Notes exchanged. Pursuant to such termination agreements, each of the option counterparties paid the Company a cash settlement amount in respect of the portion of capped call transactions being terminated. The Company received approximately $53.0 million and $38.6 million, in connection with such termination agreements related to the First Exchange and the Second Exchange, respectively.

The Convertible Senior Notes contain a cash conversion feature, and as a result, the Company has separated it into liability and equity components. The Company valued the liability component based on its borrowing rate for a similar debt instrument that does not contain a conversion feature. The equity component, which is recognized as a debt discount, was valued as the difference between the face value of the Convertible Senior Notes and the fair value of the liability component.

In connection with the Convertible Senior Notes issuance, the Company incurred deferred financing costs of $12.3 million, primarily related to fees paid to the initial purchasers of the offering, as well as legal and accounting fees. These costs were allocated on a pro rata basis, with $10.0 million allocated to the debt component and $2.2 million allocated to the equity component.

The debt discount and the debt portion of the deferred financing costs are being amortized to interest expense over the term of the Convertible Senior Notes using the effective interest rate method. The effective interest rate for the three months ended September 30, 2021 was 6.8%.

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”). Interest is 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

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Interest expense 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.

Interest expense, net, was $9.3 million and $15.0 million for the three months ended September 30, 2021 and 2020, respectively, and $36.7 million and $32.3 million for the nine months ended September 30, 2021 and 2020, respectively.

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 6. 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, and that the ultimate resolution of any such proceedings will not have a material adverse effect on its 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 August 4, 2017, the lead plaintiff in the Consolidated Securities Action, Aberdeen City Council as Administrating Authority for the North East Scotland Pension Fund (“Aberdeen”), joined by named plaintiff Bucks County Employees Retirement Fund (“Bucks County”), filed a consolidated amended complaint (the “Amended Complaint”) against the Company, the Company’s then-Chief Executive Officer, Kevin Plank, and former Chief Financial Officers Lawrence Molloy and Brad Dickerson. The Amended Complaint alleged violations of Section 10(b) (and Rule 10b-5) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and Section 20(a) control person liability under the Exchange Act against the officers named in the Amended Complaint, claiming that the defendants made material misstatements and omissions regarding, among other things, the Company's growth and consumer demand for certain of the Company's products. The class period identified in the Amended Complaint was September 16, 2015 through January 30, 2017. The Amended Complaint also asserted claims under Sections 11 and 15 of the Securities Act of 1933, as amended (the “Securities Act”), in connection with the Company’s public offering of senior unsecured notes in June 2016. The Securities Act claims were asserted against the Company, Mr. Plank, Mr. Molloy, the Company’s directors who signed the registration statement pursuant to which the offering was made and the underwriters that participated in the offering. The Amended Complaint alleged that the offering materials utilized in connection with the offering contained false and/or misleading statements and omissions regarding, among other things, the Company’s growth and consumer demand for certain of the Company’s products.

On November 9, 2017, the Company and the other defendants filed motions to dismiss the Amended Complaint. On September 19, 2018, the District Court dismissed the Securities Act claims with prejudice and the Exchange Act claims without prejudice. Lead plaintiff Aberdeen, joined by named plaintiff Monroe County Employees’ Retirement Fund (“Monroe”), filed a Second Amended Complaint on November 16, 2018, asserting claims under the Exchange Act and naming the Company and Mr. Plank as the remaining defendants. The remaining defendants filed a motion to dismiss the Second Amended Complaint on January 17, 2019. On August 19, 2019, the District Court dismissed the Second Amended Complaint with prejudice.

In September 2019, plaintiffs Aberdeen and Bucks County filed an appeal in the United States Court of Appeals for the Fourth Circuit challenging the decisions by the District Court on September 19, 2018 and August 19, 2019 (the “Appeal”). The Appeal was fully briefed as of January 16, 2020.

On November 6 and December 17, 2019, two purported shareholders of the Company filed putative securities class actions in the District Court against the Company and certain of its current and former executives (captioned Patel v. Under Armour, Inc., No. 1:19-cv-03209-RDB (“Patel”), and Waronker v. Under Armour, Inc., No. 1:19-cv-03581-RDB (“Waronker”), respectively). The complaints in Patel and Waronker alleged violations of Section 10(b) (and Rule 10b-5) of the Exchange Act, against all defendants, and Section 20(a) control person liability under the Exchange Act against the current and former officers named in the complaints. The complaints claimed that the defendants’ disclosures and statements supposedly misrepresented or omitted that the Company was purportedly shifting sales between quarterly periods allegedly to appear healthier and that the Company was under investigation

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by and cooperating with the United States Department of Justice (“DOJ”) and the United States Securities and Exchange Commission (“SEC”) since July 2017.

On November 18, 2019, Aberdeen, the lead plaintiff in the Consolidated Securities Action, filed in the District Court a motion for an indicative ruling under Federal Rule of Civil Procedure 62.1 (the “Rule 62.1 Motion”) seeking relief from the final judgment pursuant to Federal Rule of Civil Procedure 60(b). The Rule 62.1 Motion alleged that purported newly discovered evidence entitled Aberdeen to relief from the District Court’s final judgment. Aberdeen also filed motions seeking (i) to consolidate the Patel and Waronker cases with the Consolidated Securities Action, and (ii) to be appointed lead plaintiff over the consolidated cases.

On January 22, 2020, the District Court granted Aberdeen’s Rule 62.1 motion and indicated that it would grant a motion for relief from the final judgment and provide Aberdeen with the opportunity to file a third amended complaint if the Fourth Circuit remanded for that purpose. The District Court further stated that it would, upon remand, consolidate the Patel and Waronker cases with the Consolidated Securities Action and appoint Aberdeen as the lead plaintiff over the consolidated cases.

On August 13, 2020, the Fourth Circuit remanded the Appeal to the District Court for the limited purpose of allowing the District Court to rule on Aberdeen’s motion seeking relief from the final judgment pursuant to Federal Rule of Civil Procedure 60(b). On September 14, 2020, the District Court issued an order granting that relief. The District Court’s order also consolidated the Patel and Waronker cases into the Consolidated Securities Action and appointed Aberdeen as lead plaintiff over the Consolidated Securities Action.

On October 14, 2020, Aberdeen, along with named plaintiffs Monroe and KBC Asset Management NV, filed a third amended complaint (the “TAC”) in the Consolidated Securities Action, asserting claims under Sections 10(b) and 20(a) of 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 DOJ and the SEC since July 2017. The class period identified in the TAC is September 16, 2015 through November 1, 2019.

On December 4, 2020, the Company and Mr. Plank filed a motion to dismiss the TAC for failure to state a claim. That motion was denied by the Court on May 18, 2021. Discovery in the Consolidated Securities Action commenced on June 4, 2021 and is currently ongoing. 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.

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

State Court Derivative Complaints

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 consolidated complaint in the Kenney matter 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 similar to those in the Amended Complaint in the Consolidated Securities Action matter discussed above, 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 purchase of certain parcels of land from entities controlled by Mr. Plank (through Sagamore). Sagamore purchased the parcels in 2014. Its total investment in the parcels was approximately $72.0 million, which included the initial $35.0 million purchase price for the property, an additional $30.6 million to terminate a lease encumbering the property and approximately $6.4 million of development costs. As previously disclosed, in June 2016, the Company purchased the

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unencumbered parcels for $70.3 million in order to further expand the Company’s corporate headquarters to accommodate its growth needs. The Company negotiated a purchase price for the parcels that it determined represented the fair market value of the parcels and approximated the cost to the seller to purchase and develop the parcels. In connection with its evaluation of the potential purchase, the Company engaged an independent third-party to appraise the fair market value of the parcels, and the Audit Committee of the Company’s Board of Directors engaged its own independent appraisal firm to assess the parcels. The Audit Committee determined that the terms of the purchase were reasonable and fair, and the transaction was approved by the Audit Committee in accordance with the Company’s policy on transactions with related persons.

On March 29, 2019, the court in the consolidated 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 relating to the Company’s purchase of parcels in Port Covington (which derivative action has since been dismissed in its entirety). The court ordered stay in the consolidated Kenney action remains in effect at this time. In March 2021, the court in the consolidated Kenney action issued a notice of contemplated dismissal for lack of prosecution without prejudice pursuant to Maryland Rule 2-507. The court issued a second notice of contemplated dismissal for lack of prosecution without prejudice in August 2021.

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 informed both of these purported stockholders of that determination.

Between August 11, 2020 and October 21, 2020, three additional purported shareholder derivative complaints were filed in Maryland state court (in cases captioned Cordell v. Plank, et al. (filed August 11, 2020), Klein v. Plank, et al. (filed October 2, 2020), and Salo v. Plank, et al. (filed October 21, 2020), respectively).

The complaints in these cases name Mr. Plank, certain other current and former members of the Company’s Board of Directors, and certain current and former Company executives as defendants, and name the Company as a nominal defendant. The complaints in these actions assert 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 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; (iv) the Company’s supposed failure to timely disclose investigations by the SEC and DOJ; (v) the compensation paid to the Company’s directors and executives while the alleged wrongdoing was occurring; and/or (vi) stock sales by certain individual defendants. The complaints assert breach of fiduciary duty, unjust enrichment, and corporate waste claims against the individual defendants. These complaints seek damages on behalf of the Company and certain corporate governance related actions.

Prior to the filing of the derivative complaints in these three actions, none of the purported stockholders made a demand that the Company’s Board of Directors pursue the claims asserted in the complaints.

In March 2021, the court issued an order dismissing the Klein matter for lack of jurisdiction without prejudice pursuant to Maryland Rule 2-507. 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 State 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 State Derivative Action.

The Company believes that the claims asserted in the derivative complaints filed in Maryland state court are without merit and intends to defend these matters vigorously. However, because of the inherent uncertainty as to the outcome of these proceedings, the Company is unable at this time to estimate the possible impact of the outcome of these matters.

Federal Court Derivative Complaints

In July 2018, a stockholder derivative complaint was filed in the United States District Court for the District of Maryland, in a case captioned Andersen v. Plank, et al. The complaint in the Andersen matter names Mr. Plank, certain other current and former members of the Company’s Board of Directors and certain former Company executives as defendants, and names the Company as a nominal defendant. The complaint asserts breach of fiduciary duty and unjust enrichment claims against the individual defendants, and seeks damages on behalf of the Company and certain corporate governance related actions. The complaint includes allegations similar to those in the Amended Complaint in the Consolidated Securities Action matter discussed above, challenging, among other

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things, the Company’s disclosures related to growth and consumer demand for certain of the Company’s products and stock sales by certain individual defendants.

The Andersen action was stayed from December 2018 to August 2019 and again from September 2019 to September 2020 (the “2019 Stay Order”). Pursuant to a series of court ordered stipulations, the terms of the 2019 Stay Order remained in effect through and including January 19, 2021. The stay expired on January 19, 2021.

Prior to the filing of the complaint in the Andersen action, the plaintiff had sent the Company’s Board of Directors a letter demanding that the Company pursue claims similar to the claims asserted in the complaint. 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 informed the plaintiff of that determination. During the pendency of the Andersen action, the plaintiff sent the Company’s Board of Directors a second letter demanding that the Company pursue claims similar to the claims asserted in the TAC in the Consolidated Securities Action. 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 informed the plaintiff of that determination.

In September 2020, two additional derivative complaints were filed in the United States District Court for the District of Maryland (in cases captioned Olin v. Plank, et al. (filed September 1, 2020), and Smith v. Plank, et al. (filed September 8, 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. On November 20, 2020, another derivative complaint was filed in the United States District Court for the District of Maryland, in a case captioned Viskovich v. Plank, et al. Prior to filing his derivative complaint, the plaintiff in the Viskovich matter made a demand that the Company’s Board of Directors pursue the claims asserted in the complaint but filed suit before the Board had responded to the demand. Following an investigation, a majority of disinterested and independent directors of the Company determined that the claims asserted in the demand by the plaintiff in the Viskovich action should not be pursued by the Company and informed the plaintiff of that determination.

The complaints in the Olin, Smith, and Viskovich cases name Mr. Plank, certain other current and former members of the Company’s Board of Directors, and certain current and former Company executives as defendants, and name the Company as a nominal defendant. The complaints in these actions assert 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 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; (iv) the Company’s supposed failure to timely disclose investigations by the SEC and DOJ; and/or (v) the compensation paid to the Company’s directors and executives while the alleged wrongdoing was occurring. The complaints assert breach of fiduciary duty, unjust enrichment, gross mismanagement, and/or corporate waste claims against the individual defendants. The Viskovich complaint also asserts a contribution claim against certain defendants under the federal securities laws. These complaints seek damages on behalf of the Company and certain corporate governance related actions.

On January 27, 2021, the court entered an order consolidating for all purposes the Andersen, Olin, Smith and Viskovich actions into a single action under the caption Andersen v. Plank, et al. (the “Federal Court Derivative Action”). In February 2021, counsel for the Smith and Olin plaintiffs, on the one hand, and counsel for the Andersen and Viskovich plaintiffs, on the other hand, filed motions seeking to be appointed as lead counsel in the Federal Court Derivative Action. These motions are currently pending.

The Company believes that the claims asserted in the Federal Court 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.

NOTE 7. FAIR VALUE MEASUREMENTS

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (an exit price). 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

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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.

Our 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, 2021						December 31, 2020						September 30, 2020
(In thousands)	Level 1		Level 2		Level 3		Level 1		Level 2		Level 3		Level 1		Level 2		Level 3
Derivative foreign currency contracts (see Note 8)	$	—	$	3,197	$	—	$	—	$	(22,122)	$	—	$	—	$	(203)	$	—
TOLI policies held by the Rabbi Trust	$	—	$	8,525	$	—	$	—	$	7,697	$	—	$	—	$	7,229	$	—
Deferred Compensation Plan obligations	$	—	$	(15,122)	$	—	$	—	$	(14,314)	$	—	$	—	$	(13,113)	$	—

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 trust owned life insurance (“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 Under Armour, Inc. Deferred Compensation Plan (the “Deferred Compensation Plan”), which represent the underlying liabilities to participants in the Deferred Compensation Plan. Liabilities under the Deferred Compensation Plan are recorded at amounts due to participants, based on the fair value of participants’ selected investments.

As of September 30, 2021, December 31, 2020, and September 30, 2020, the fair value of the Convertible Senior Notes was $150.2 million, $828.2 million, and $624.8 million, respectively. The Company entered into exchange agreements with certain holders during the three and nine months ended September 30, 2021 to exchange approximately $169.0 million and $419.0 million, respectively, in aggregate principal amount of the Convertible Senior Notes for a combination of cash and shares (see Note 5 to the unaudited condensed consolidated financial statements).

As of September 30, 2021, December 31, 2020, and September 30, 2020, the fair value of the Senior Notes was $622.5 million, $602.6 million, and $566.6 million, respectively.

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).

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 8. 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

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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, 2021, 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;

•U.S. Dollar/Japanese Yen; and

•U.S. Dollar/Korean Won currency pairs.

All derivatives are recognized on the unaudited 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 unaudited condensed consolidated balance sheets. Refer to Note 7 of the unaudited condensed consolidated financial statements for a discussion of the fair value measurements:

(In thousands)	Balance Sheet Classification	September 30, 2021		December 31, 2020		September 30, 2020
Derivatives designated as hedging instruments under ASC 815
Foreign currency contracts	Other current assets	$	6,424	$	—	$	5,659
Foreign currency contracts	Other long term assets	4,377		—		—
Total derivative assets designated as hedging instruments		$	10,801	$	—	$	5,659
Foreign currency contracts	Other current liabilities	$	7,123	$	17,601	$	4,942
Foreign currency contracts	Other long term liabilities	620		6,469		—
Total derivative liabilities designated as hedging instruments		$	7,743	$	24,070	$	4,942
Derivatives not designated as hedging instruments under ASC 815
Foreign currency contracts	Other current assets	$	4,935	$	2,384	$	5,373
Total derivative assets not designated as hedging instruments		$	4,935	$	2,384	$	5,373
Foreign currency contracts	Other current liabilities	$	2,242	$	6,464	$	1,714
Total derivative liabilities not designated as hedging instruments		$	2,242	$	6,464	$	1,714

The following table presents the amounts in the unaudited condensed consolidated statements of operations in which the effects of cash flow hedges are recorded and the effects of cash flow hedge activity on these line items:

	Three months ended September 30,								Nine months ended September 30,
	2021				2020				2021				2020
(In thousands)	Total		Amount of Gain (Loss) on Cash Flow Hedge Activity		Total		Amount of Gain (Loss) on Cash Flow Hedge Activity		Total		Amount of Gain (Loss) on Cash Flow Hedge Activity		Total	Amount of Gain (Loss) on Cash Flow Hedge Activity
Net revenues	$	1,545,532	$	(1,953)	$	1,433,021	$	218	$	4,154,261	$	(7,477)	$3,070,901	$	3,495
Cost of goods sold	$	757,428	$	(3,947)	$	746,701	$	4,496	2,068,695		(8,586)		1,604,428	7,179
Interest income (expense), net	$	(9,261)	$	(9)	$	(14,955)	$	(9)	(36,705)		(27)		(32,251)	(27)
Other income (expense), net	$	(29,476)	$	—	$	(7,184)	$	4	(75,150)		—		(10,493)	25

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The following tables present the amounts affecting the unaudited statements of comprehensive income (loss):

(In thousands)	Balance as of June 30, 2021		Amount of gain (loss) recognized in other comprehensive income (loss) on derivatives		Amount of gain (loss) reclassified from other comprehensive income (loss) into income		Balance as of September 30, 2021
Derivatives designated as cash flow hedges
Foreign currency contracts	$	(20,346)	$	14,459	$	(5,900)	$	13
Interest rate swaps	(522)		—		(9)		(513)
Total designated as cash flow hedges	$	(20,868)	$	14,459	$	(5,909)	$	(500)

(In thousands)	Balance as of December 31, 2020		Amount of gain (loss) recognized in other comprehensive income (loss) on derivatives		Amount of gain (loss) reclassified from other comprehensive income (loss) into income		Balance as of September 30, 2021
Derivatives designated as cash flow hedges
Foreign currency contracts	$	(25,908)	$	9,858	$	(16,063)	$	13
Interest rate swaps	(541)		—		(28)		$	(513)
Total designated as cash flow hedges	$	(26,449)	$	9,858	$	(16,091)	$	(500)

(In thousands)	Balance as of June 30, 2020		Amount of gain (loss) recognized in other comprehensive income (loss) on derivatives		Amount of gain (loss) reclassified from other comprehensive income (loss) into income		Balance as of September 30, 2020
Derivatives designated as cash flow hedges
Foreign currency contracts	$	26,200	$	(18,432)	$	4,701	$	3,066
Interest rate swaps	(559)		—		(9)		(550)
Total designated as cash flow hedges	$	25,641	$	(18,432)	$	4,692	$	2,516

(In thousands)	Balance as of December 31, 2019		Amount of gain (loss) recognized in other comprehensive income (loss) on derivatives		Amount of gain (loss) reclassified from other comprehensive income (loss) into income		Balance as of September 30, 2020
Derivatives designated as cash flow hedges
Foreign currency contracts	$	(6,005)	$	19,727	$	10,655	$	3,066
Interest rate swaps	(577)		—		(27)		(550)
Total designated as cash flow hedges	$	(6,582)	$	19,727	$	10,628	$	2,516

The following table presents the amounts in the unaudited condensed consolidated statements of operations in which the effects of undesignated derivative instruments are recorded and the effects of fair value hedge activity on these line items:

	Three months ended September 30,								Nine months ended September 30,
	2021				2020				2021				2020
(In thousands)	Total		Amount of Gain (Loss) on Fair Value Hedge Activity		Total		Amount of Gain (Loss) on Fair Value Hedge Activity		Total		Amount of Gain (Loss) on Fair Value Hedge Activity		Total		Amount of Gain (Loss) on Fair Value Hedge Activity
Other income (expense), net	$	(29,476)	$	(2,382)	$	(7,184)	$	(962)	$	(75,150)	$	(3,197)	$	(10,493)	$	1,022

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Cash Flow Hedges

The Company is exposed to gains and losses resulting from fluctuations in foreign currency exchange rates relating to transactions generated by its international subsidiaries in currencies other than their local currencies. These gains and losses are driven by non-functional currency generated revenue, non-functional currency inventory purchases, investments in U.S. Dollar denominated available-for-sale debt securities, and certain other intercompany transactions. The Company enters into foreign currency contracts to reduce the risk associated with the foreign currency exchange rate fluctuations on these transactions. Certain contracts are designated as cash flow hedges. As of September 30, 2021, December 31, 2020, and September 30, 2020, the aggregate notional value of the Company's outstanding cash flow hedges was $739.1 million, $812.5 million, and $301.2 million, respectively, with contract maturities ranging from one to twenty-four months.

The Company may enter into long term debt arrangements with various lenders which bear a range of fixed and variable rates of interest. The nature and amount of the Company's long term debt can be expected to vary as a result of future business requirements, market conditions and other factors. The Company may elect to enter into interest rate swap contracts to reduce the impact associated with interest rate fluctuations. The interest rate swap contracts are accounted for as cash flow hedges. Refer to Note 5 of the unaudited condensed consolidated financial statements for a discussion of long term debt. As of September 30, 2021, December 31, 2020, and September 30, 2020, the Company had no outstanding interest rate swap contracts.

For contracts designated as cash flow hedges, the changes in fair value are reported as other comprehensive income (loss) and are recognized in current earnings in the period or periods during which the hedged transaction affects current earnings. Effective hedge results are classified in the unaudited condensed consolidated statements of operations in the same manner as the underlying exposure.

Undesignated Derivative Instruments

The Company may elect to enter into foreign exchange forward contracts to mitigate the change in fair value of specific assets and liabilities on the unaudited condensed consolidated balance sheets. These undesignated instruments are recorded at fair value as a derivative asset or liability on the unaudited condensed consolidated balance sheets with their corresponding change in fair value recognized in other expense, net, together with the re-measurement gain or loss from the hedged balance sheet position. As of September 30, 2021, December 31, 2020, and September 30, 2020, the total notional value of the Company's outstanding undesignated derivative instruments was $431.1 million, $313.1 million, and $262.9 million, respectively.

Credit Risk

The Company enters into derivative contracts with major financial institutions with investment grade credit ratings and is exposed to credit losses in the event of non-performance by these financial institutions. This credit risk is generally limited to the unrealized gains in the derivative contracts. However, the Company monitors the credit quality of these financial institutions and considers the risk of counterparty default to be minimal.

NOTE 9. PROVISION FOR INCOME TAXES

Provision for Income Taxes

The Company computes its quarterly income tax provision under the effective tax rate method by applying an estimated anticipated annual effective rate to the year-to-date earnings. Losses from jurisdictions for which no benefit can be recognized are excluded from the overall computations of the estimated annual effective tax rate and a separate estimated annual effective tax rate is computed and applied to ordinary income or loss in the loss jurisdiction. Income taxes for any significant and unusual or extraordinary transactions are computed and recorded in the period in which the specific transaction occurs. For the comparable three and nine months ended September 30, 2021 and 2020 respectively, all global jurisdictions were included in the estimated annual effective tax rate.

The effective rates for income taxes were 14.2% and (10.2)% for the three months ended September 30, 2021 and 2020, respectively. The change in the Company’s effective tax rate was primarily driven by the proportion of earnings subject to tax in the United States as compared to foreign jurisdictions in each period, the recording of valuation allowance releases against current 2021 earnings forecasted in the United States, and discrete items during the three months ended September 30, 2020.

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Valuation Allowance

The Company evaluates on a quarterly basis whether the deferred tax assets are realizable which requires significant judgment. The Company considers all available positive and negative evidence, including historical operating performance and expectations of future operating performance. To the extent the Company believes it is more likely than not that all or some portion of the asset will not be realized, valuation allowances are established against the Company's deferred tax assets, which increase income tax expense in the period when such a determination is made.

As noted in the Company's Annual Report on Form 10-K for Fiscal 2020, a significant portion of the Company’s deferred tax assets relate to United States federal and state taxing jurisdictions. Realization of these deferred tax assets is dependent on future United States pre-tax earnings. As of September 30, 2021 the Company continues to believe that the weight of the negative evidence outweighs the positive evidence regarding the realization of the Company’s United States federal and the majority of the United States state deferred tax assets. Accordingly, the Company continues to maintain valuation allowances on these deferred tax assets. Furthermore, consistent with prior periods, valuation allowances have also been recorded against select foreign deferred tax assets in jurisdictions where the weight of negative evidence outweighs the positive evidence regarding the realization of deferred tax assets.

NOTE 10. EARNINGS PER SHARE

The following represents a reconciliation from basic income (loss) per share to diluted income (loss) per share:

	Three Months Ended September 30,				Nine Months Ended September 30,
(In thousands, except per share amounts)	2021		2020		2021		2020
Numerator
Net income (loss)	$	113,444	$	38,946	$	250,403	$	(733,630)
Denominator
Weighted average common shares outstanding Class A, B and C	470,002		454,541		461,908		453,847
Effect of dilutive securities Class A, B, and C	3,114		2,133		3,010		—
Weighted average common shares and dilutive securities outstanding Class A, B, and C	473,116		456,674		464,918		453,847
Basic net income (loss) per share of Class A, B and C common stock	$	0.24	$	0.09	$	0.54	$	(1.62)
Diluted net income (loss) per share of Class A, B and C common stock	$	0.24	$	0.09	$	0.54	$	(1.62)

Effects of potentially dilutive securities are presented only in periods in which they are dilutive. Stock options and restricted stock units representing 0.5 million and 1.9 million shares of Class A and Class C Common Stock outstanding for the three and nine months ended September 30, 2021, respectively, (three and nine months ended September 30, 2020 - 7.3 million and 0 respectively), were excluded from the computation of diluted earnings per share because their effect would have been anti-dilutive. Due to the Company being in a net loss position for the nine months ended September 30, 2020, there were no stock options or restricted stock units included in the computation of diluted earnings per share, as their effect would have been anti-dilutive.

NOTE 11. SEGMENT DATA AND DISAGGREGATED REVENUE

The Company’s operating segments are based on how the Chief Operating Decision Maker (“CODM”) makes decisions about allocating resources and assessing performance. As such, the CODM receives discrete financial information for the Company's principal business by geographic region based on the Company’s strategy of being a global brand. These geographic regions include North America, Europe, the Middle East and Africa (“EMEA”), Asia-Pacific, and Latin America. Each geographic segment operates exclusively in one industry: the development, marketing and distribution of branded performance apparel, footwear and accessories. Total expenditures for additions to long-lived assets are not disclosed as this information is not regularly provided to the CODM.

Prior to the sale of MyFitnessPal in December 2020, the CODM also received discrete financial information for the Connected Fitness Segment. However, beginning January 1, 2021, the Company no longer reports Connected Fitness as a discrete reportable operating segment (see Note 1 to the unaudited condensed consolidated financial

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statements). All prior period balances have been recast to conform to current period presentation. Such reclassifications did not affect total consolidated revenues, consolidated income from operations or consolidated net income.

The Company excludes certain corporate costs from its segment profitability measures. The Company reports these costs within Corporate Other, along with the revenue and costs related to the Company's MMR platforms, which is designed to provide increased transparency and comparability of the Company's operating segments' performance. Furthermore, the majority of the costs included within Corporate Other consists largely of general and administrative expenses not allocated to an operating segment, including expenses associated with centrally managed departments such as global marketing, global IT, global supply chain, innovation, and other corporate support functions; costs related to the Company's global assets and global marketing; costs related to the Company’s headquarters such as restructuring and restructuring related charges; and certain foreign currency hedge gains and losses.

The following tables summarize the Company's net revenues and operating income (loss) by its geographic segments. Intercompany balances were eliminated for separate disclosure:

	Three Months Ended September 30,				Nine Months Ended September 30,
(In thousands)	2021		2020		2021		2020
Net revenues
North America	$	1,035,862	$	962,565	$	2,747,082	$	2,021,247
EMEA	241,201		210,111		642,308		437,140
Asia-Pacific	211,950		178,895		614,539		397,846
Latin America	56,380		44,338		151,203		108,573
Corporate Other (1)	139		37,112		(871)		106,095
Total net revenues	$	1,545,532	$	1,433,021	$	4,154,261	$	3,070,901

	Three Months Ended September 30,				Nine Months Ended September 30,
(In thousands)	2021		2020		2021		2020
Operating income (loss)
North America	$	292,367	$	224,593	$	728,698	$	251,579
EMEA	41,772		40,834		108,350		43,840
Asia-Pacific	40,529		19,248		111,088		(30,040)
Latin America	10,831		1,802		18,289		(50,756)
Corporate Other (1)	(213,435)		(227,907)		(566,266)		(883,907)
Total operating income (loss)	172,064		58,570		400,159		(669,284)
Interest expense, net	(9,261)		(14,955)		(36,705)		(32,251)
Other income (expense), net	(29,476)		(7,184)		(75,150)		(10,493)
Income (loss) before income taxes	$	133,327	$	36,431	$	288,304	$	(712,028)

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

	Three Months Ended September 30,				Nine Months Ended September 30,
(In thousands)	2021		2020		2021		2020
Apparel	$	1,058,231	$	927,041	$	2,742,465	$	1,951,186
Footwear	329,718		298,687		981,406		693,464
Accessories	126,345		145,060		355,244		268,912
Net Sales	1,514,294		1,370,788		4,079,115		2,913,562
License revenues	31,099		25,121		76,017		51,244
Corporate Other (1)	139		37,112		(871)		106,095
Total net revenues	$	1,545,532	$	1,433,021	$	4,154,261	$	3,070,901

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	Three Months Ended September 30,				Nine Months Ended September 30,
(In thousands)	2021		2020		2021		2020
Wholesale	$	910,655	$	830,478	$	2,477,853	$	1,721,432
Direct-to-consumer	603,639		540,310		1,601,262		1,192,130
Net Sales	1,514,294		1,370,788		4,079,115		2,913,562
License revenues	31,099		25,121		76,017		51,244
Corporate Other (1)	139		37,112		(871)		106,095
Total net revenues	$	1,545,532	$	1,433,021	$	4,154,261	$	3,070,901

(1) Prior to Fiscal 2021, the Company's Connected Fitness segment was separately disclosed, however, effective January 1, 2021, Corporate Other now includes the remaining Connected Fitness business consisting of MMR for Fiscal 2021 and the entire Connected Fitness business for Fiscal 2020. All prior periods were recast to conform to the current period presentation. Such reclassifications did not affect total consolidated net revenues, consolidated income from operations or consolidated net income (see Note 1 to the unaudited condensed consolidated financial statements).

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

FORWARD-LOOKING STATEMENTS

Some of the statements contained in this Form 10-Q, including this Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A"), constitute forward-looking statements. Forward-looking statements relate to expectations, beliefs, projections, future plans and strategies, anticipated events or trends and similar expressions concerning matters that are not historical facts, such as statements regarding our future financial condition or results of operations, our prospects and strategies for future growth, the impact of the COVID-19 pandemic on our business and results of operations and the operations of our suppliers and logistics providers, our plans to reduce our operating expenses, anticipated charges and restructuring costs, projected savings related to our restructuring plans and the timing thereof, the development and introduction of new products, the implementation of our marketing and branding strategies, and the future benefits and opportunities from significant investments. In many cases, you can identify forward-looking statements by terms such as “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “outlook,” “potential” or the negative of these terms or other comparable terminology.

The forward-looking statements contained in this Form 10-Q reflect our current views about future events and are subject to risks, uncertainties, assumptions and changes in circumstances that may cause events or our actual activities or results to differ significantly from those expressed in any forward-looking statement. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future events, results, actions, levels of activity, performance or achievements. Readers are cautioned not to place undue reliance on these forward-looking statements. A number of important factors could cause actual results to differ materially from those indicated by these forward-looking statements, including, but not limited to, those factors described in “Risk Factors” and MD&A herein and in our Annual Report on Form 10-K for Fiscal 2020. These factors include without limitation:

•the impact of the COVID-19 pandemic on our industry and our business, financial condition and results of operations, including recent impacts on the global supply chain;

•failure of our suppliers or manufacturers to produce or deliver our products in a timely or cost-effective manner;

•changes in general economic or market conditions that could affect overall consumer spending or our industry;

•increased competition causing us to lose market share or reduce the prices of our products or to increase our marketing efforts significantly;

•fluctuations in the costs of raw materials and commodities we use in our products and our supply chain;

•changes to the financial health of our customers;

•our ability to successfully execute our long-term strategies;

•our ability to effectively drive operational efficiency in our business and successfully execute any restructuring plans and realize their expected benefits;

•our ability to effectively develop and launch new, innovative and updated products;

•our ability to accurately forecast consumer shopping preferences and consumer demand for our products and manage our inventory in response to changing demands;

•loss of key customers, suppliers or manufacturers;

•our ability to further expand our business globally and to drive brand awareness and consumer acceptance of our products in other countries;

•our ability to manage the increasingly complex operations of our global business;

•our ability to successfully manage or realize expected results from significant transactions and investments;

•our ability to effectively market and maintain a positive brand image;

•the availability, integration and effective operation of information systems and other technology, as well as any potential interruption of such systems or technology;

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•any disruptions, delays or deficiencies in the design, implementation or application of our global operating and financial reporting information technology system;

•our ability to attract key talent and retain the services of our senior management and key employees;

•our ability to access capital and financing required to manage our business on terms acceptable to us;

•our ability to accurately anticipate and respond to seasonal or quarterly fluctuations in our operating results;

•risks related to foreign currency exchange rate fluctuations;

•our ability to comply with existing trade and other regulations, and the potential impact of new trade, tariff and tax regulations on our profitability;

•risks related to data security or privacy breaches; and

•our potential exposure to litigation and other proceedings.

The forward-looking statements contained in this Form 10-Q reflect our views and assumptions only as of the date of this Form 10-Q. We undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events.

The following MD&A is intended to help readers understand our results of operations and financial condition, and is provided as a supplement to, and should be read in conjunction with, our unaudited condensed consolidated financial statements and the accompanying Notes to our unaudited condensed consolidated financial statements under Part I of this Quarterly Report on Form 10-Q.

All dollar and percentage comparisons made herein refer to the three and nine months ended September 30, 2021 compared with the three and nine months ended September 30, 2020, unless otherwise stated. Due to the significant impact of COVID-19 on our Fiscal 2020 figures, certain comparisons to comparable periods of our fiscal year ended December 31, 2019 ("Fiscal 2019") have been included for additional context.

OVERVIEW

We are a leading developer, marketer, and distributor of branded performance apparel, footwear, and accessories. Our brand’s moisture-wicking fabrications are engineered in various designs and styles for wear in nearly every climate to provide a performance alternative to traditional products. Our products are sold worldwide and worn by athletes at all levels, from youth to professional, on playing fields around the globe, and by consumers with active lifestyles.

Through the third quarter of Fiscal 2021, we have realized better than expected wholesale and direct-to-consumer sales based on better sell through and demand for Under Armour products in North America, Asia-Pacific, and EMEA. Strategically and operationally, we remain focused on driving premium brand right growth and improved profitability. In the near term, and particularly in our North American business, we are focused on the quality of our sales driven by four main strategies: reducing our promotional activities; constraining supply against demand; exiting undifferentiated retail; and maintaining an appropriate level of sales to the off-price channel. Over the long term, our growth strategy is predicated on delivering industry-leading product innovation; return-driven investments into connecting even more deeply with our consumers through marketing activations and premium experiences; and the expansion of our direct-to-consumer and international businesses.

Quarterly Results

Financial highlights for the three months ended September 30, 2021, as compared to the same period in Fiscal 2020 include:

•Total net revenues increased 7.9%.

•Within our channels, wholesale revenue increased 9.7% and direct-to-consumer revenue increased 11.7%.

•Within our product categories, apparel revenue increased 14.2%, footwear increased 10.4%, and accessories revenue decreased 12.9%.

•Revenue in our North America, EMEA, Asia-Pacific, and Latin-America segments increased 7.6%, 14.8%, 18.5%, and 27.2%, respectively.

•Revenues from Corporate Other decreased 99.6% primarily due to the sale of the MyFitnessPal platform in December 2020.

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•Gross margin increased 310 basis points to 51.0%.

•Selling, general and administrative expenses increased 8.3%.

•Restructuring and impairment charges decreased 77.6% from $74.2 million during the three months ended September 30, 2020 to $16.7 million during the three months ended September 30, 2021.

COVID-19 Update

The COVID-19 pandemic has caused, and we expect will continue to cause, disruption and volatility in our business and in the businesses of our wholesale customers, licensing partners, suppliers, and vendors.

For instance, the pandemic has caused manufacturing challenges, with temporary closures or other restrictions placed on factories, in key sourcing countries in Southeast Asia, including Vietnam, where we source approximately one third of our products. Additionally, the COVID-19 pandemic has caused global logistical challenges, including shipping container shortages, transportation delays, and port congestion. These challenges have disrupted some of our normal inbound and outbound inventory flow, which has required us to incur increased freight costs, and are impacting the timing of sales to some of our customers as we work to manage product availability and inventory levels and in certain cases adjust orders and shipping with our factory partners and logistic suppliers. While at the time of filing of this Form 10-Q nearly all the factories that we do business with are open, including in Vietnam, we expect that these manufacturing and sourcing challenges will continue into the next several quarters and could negatively impact our sales, especially as we believe it will take some time to reach full operating capacity levels again. We also expect to continue to incur increased freight costs as a means to mitigate some inventory delays over the next several quarters.

Moreover, governments worldwide continue to periodically impose preventative and protective actions, such as temporary travel bans, forced business closures, and stay-at-home orders, all in an effort to reduce the spread of the virus. However, such government measures are not implemented consistently or simultaneously around the world, thus making our business susceptible to volatility on a global and regional basis. We believe we may continue to experience varying degrees of volatility, business disruptions and periods of closure of our stores, distribution centers and corporate facilities, although, as of September 30, 2021, the majority of our brand and factory house stores and the stores of our wholesale customers have reopened. In certain locations, however, primarily Asia Pacific, some of our brand and factory house stores and the stores of our wholesale customers remain closed. Where reopening has been permitted, some of these retail stores are operating with restrictive and precautionary measures in place such as reduced operating hours, physical distancing, enhanced cleaning and sanitation, and limited occupancy levels.

The COVID-19 pandemic and related disruptions across the global supply chain and retail environment, remains a risk that could have material adverse impacts to our future revenue growth as well as to our overall profitability. The extent of the impact of the COVID-19 pandemic on our operational and financial performance depends on future developments that are outside of our control. For a more complete discussion of the COVID-19 related risks facing our business, refer to our "Risk Factors" section included in Item 1A in our Annual Report on Form 10-K for Fiscal 2020.

In connection with global legislation, including the Coronavirus Aid, Relief, and Economic Security ("CARES") Act, we recognized certain incentives totaling $0.6 million and $2.7 million for the three and nine months ended September 30, 2021, respectively, and $1.5 million and $6.6 million for the three and nine months ended September 30, 2020, respectively. The incentives were recorded as a reduction of the associated costs which we incurred within selling, general and administrative expenses in the unaudited condensed consolidated statement of operations.

Segment Presentation and Marketing

As previously disclosed, effective January 1, 2021, we no longer report Connected Fitness as a discrete reportable operating segment. Corporate Other now includes the remaining Connected Fitness business consisting of MMR for Fiscal 2021 and the entire Connected Fitness business for Fiscal 2020. Please refer to Note 1 for a basis of our presentation and to Note 11 for a complete presentation of the segment data. All prior period balances have been recast to conform to current period presentation.

Corporate Other consists primarily of revenue and costs related to our MMR platforms, as well as general and administrative expenses not allocated to an operating segment, including expenses associated with centrally managed departments such as global marketing, global IT, global supply chain, innovation, and other corporate support functions; costs related to our global assets and global marketing, costs related to our headquarters; restructuring and impairment related charges; and certain foreign currency hedge gains and losses.

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Fiscal Year End Change

During the first quarter of Fiscal 2021, our Board of Directors approved a change in our fiscal year end from December 31 to March 31, effective for the fiscal year beginning April 1, 2022. Because our largest quarters are currently realized in the period from July 1 through December 31, we believe that this change will provide greater alignment with our business cycle and financial reporting. There will be no change to Fiscal 2021, which will end on December 31, 2021 and is expected to be reported in February of 2022. Following a three month-transition period (January 1, 2022 – March 31, 2022), our Fiscal 2023 will run from April 1, 2022 through March 31, 2023. Consequently, there will be no Fiscal 2022.

2020 Restructuring

During Fiscal 2020, our Board of Directors approved a restructuring plan ranging between $550.0 million to $600.0 million in costs (the "2020 restructuring plan") designed to rebalance our cost base to further improve profitability and cash flow generation.

Restructuring and related impairment charges and recoveries require us to make certain judgments and estimates regarding the amount and timing as to when these charges or recoveries occur. The estimated liability could change subsequent to its recognition, requiring adjustments to the expense and the liability recorded. On a quarterly basis, we conduct an evaluation of the related liabilities and expenses and may revise our assumptions and estimates as appropriate, as new or updated information becomes available. As of September 30, 2021, we currently estimate total restructuring and related charges associated with the 2020 restructuring plan will range between $525 million to $575 million.

The restructuring and related charges primarily consist of up to approximately:

•$199.0 million of cash restructuring charges, of which approximately $28.0 million relates to employee severance and benefit costs, $14 million relates to facility and lease termination costs and $157.0 million relates to contract termination and other restructuring costs; and

•$376.0 million of non-cash charges, of which approximately $291.0 million relates to an impairment charge on our New York City flagship store and $85.0 million relates to intangibles and other asset related impairments.

We recorded $16.8 million and $26.9 million of restructuring and related impairment charges for the three and nine months ended September 30, 2021, respectively, and $70.2 million and $410.3 million for the three and nine months ended September 30, 2020, respectively, under the 2020 restructuring plan. For more details on the 2020 restructuring plan, see Note 3 to our unaudited condensed consolidated financial statements.

These charges require us to make certain judgments and estimates regarding the amount and timing of restructuring and related impairment charges or recoveries. Our estimated liability could change subsequent to its recognition, requiring adjustments to the expense and the liability recorded. We expect to recognize any remaining charges related to this plan by the first quarter of calendar year 2022.

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RESULTS OF OPERATIONS

The following tables set forth key components of our results of operations for the periods indicated, both in dollars and as a percentage of net revenues:

	Three Months Ended September 30,						Nine Months Ended September 30,
(In thousands)	2021		2020		Change increase (decrease)		2021		2020		Change increase (decrease)
Net revenues	$	1,545,532	$	1,433,021	$	112,511	$	4,154,261	$	3,070,901	$	1,083,360
Cost of goods sold	757,428		746,701		10,727		2,068,695		1,604,428		464,267
Gross profit	788,104		686,320		101,784		2,085,566		1,466,473		619,093
Selling, general and administrative expenses	599,384		553,549		45,835		1,659,025		1,586,156		72,869
Restructuring and impairment charges	16,656		74,201		(57,545)		26,382		549,601		(523,219)
Income (loss) from operations	172,064		58,570		113,494		400,159		(669,284)		1,069,443
Interest income (expense), net	(9,261)		(14,955)		5,694		(36,705)		(32,251)		(4,454)
Other income (expense), net	(29,476)		(7,184)		(22,292)		(75,150)		(10,493)		(64,657)
Income (loss) before income taxes	133,327		36,431		96,896		288,304		(712,028)		1,000,332
Income tax expense (benefit)	18,962		(3,714)		22,676		38,870		14,696		24,174
Income (loss) from equity method investments	(921)		(1,199)		278		969		$	(6,906)	$	7,875
Net income (loss)	$	113,444	$	38,946	$	74,498	$	250,403	$	(733,630)	$	984,033

	Three Months Ended September 30,				Nine Months Ended September 30,
(As a percentage of net revenues)	2021		2020		2021		2020
Net revenues	100.0	%	100.0	%	100.0	%	100.0	%
Cost of goods sold	49.0	%	52.1	%	49.8	%	52.2	%
Gross profit	51.0	%	47.9	%	50.2	%	47.8	%
Selling, general and administrative expenses	38.8	%	38.6	%	39.9	%	51.7	%
Restructuring and impairment charges	1.1	%	5.2	%	0.6	%	17.9	%
Income (loss) from operations	11.1	%	4.1	%	9.6	%	(21.8)	%
Interest income (expense), net	(0.6)	%	(1.0)	%	(0.9)	%	(1.1)	%
Other income (expense), net	(1.9)	%	(0.5)	%	(1.8)	%	(0.3)	%
Income (loss) before income taxes	8.6	%	2.5	%	6.9	%	(23.2)	%
Income tax expense (benefit)	1.2	%	(0.3)	%	0.9	%	0.5	%
Loss from equity method investment	(0.1)	%	(0.1)	%	—	%	(0.2)	%
Net income (loss)	7.3	%	2.7	%	6.0	%	(23.9)	%

Revenues:

Net revenues consist of net sales, license revenues, and revenues from digital subscriptions and advertising. Net sales consist of sales from apparel, footwear and accessories product. Our license revenues primarily consist of fees paid to us by licensees in exchange for the use of our trademarks on their products.

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Net revenues by product category are summarized below for the periods indicated:

	Three Months Ended September 30,						Nine Months Ended September 30,
(In thousands)	2021		2020		Change increase (decrease)		2021		2020		Change increase (decrease)
Apparel	$	1,058,231	$	927,041	$	131,190	$	2,742,465	$	1,951,186	$	791,279
Footwear	329,718		298,687		31,031		981,406		693,464		287,942
Accessories	126,345		145,060		(18,715)		355,244		268,912		86,332
Net Sales	1,514,294		1,370,788		143,506		4,079,115		2,913,562		1,165,553
License revenues	31,099		25,121		5,978		76,017		51,244		24,773
Corporate Other (1)	139		37,112		(36,973)		(871)		106,095		(106,966)
Total net revenues	$	1,545,532	$	1,433,021	$	112,511	$	4,154,261	$	3,070,901	$	1,083,360

(1) Corporate Other primarily includes foreign currency hedge gains and losses related to revenues generated by entities within our operating segments but managed through our central foreign exchange risk management program. Effective January 1, 2021, included within Corporate Other is the operating results of the remaining Connected Fitness business consisting of MMR for Fiscal 2021 and the entire Connected Fitness for Fiscal 2020. All prior periods were recast to conform to the current period presentation. Such reclassifications did not affect total consolidated revenues, consolidated income from operations or consolidated net income (see Note 1 to our unaudited condensed consolidated financial statements).

Net sales

Net sales increased by $143.5 million, or 10.5%, to $1,514.3 million during the three months ended September 30, 2021, as compared to $1,370.8 million during the same period in Fiscal 2020. The increase in net sales was primarily driven by increased revenues in apparel and footwear, partially offset by a decrease in revenues in accessories. Apparel saw strength across several sports categories, particularly Train and Golf, and footwear grew primarily in Run, with revenue growth in both product types driven primarily by higher average selling prices, which benefited from less promotions and discounts. Decreases in accessories revenues were due to lower unit sales, primarily due to lower demand for sports masks. When compared to the same period in Fiscal 2019, net sales increased 11.8%.

Net sales increased by $1,165.6 million, or 40.0%, to $4,079.1 million during the nine months ended September 30, 2021, as compared to $2,913.6 million during the same period in Fiscal 2020. The increase in net sales was primarily driven by increased unit sales across all our product categories including apparel, footwear, and accessories. The increase in demand was primarily due to the significant disruptions we experienced during the second quarter of Fiscal 2020 related to COVID-19, including cancellations of orders by our wholesale partners and closures of retail locations, with the majority shut down or operating at a reduced capacity in the prior period, including our own brand and factory house stores as well as the stores of our wholesale customers. Increased demand for the nine months ended September 30, 2021 was also driven by changes to customer order flow and supply chain timing from the fourth quarter of Fiscal 2020 to the first quarter of Fiscal 2021. When compared to the same period in Fiscal 2019, net sales increased 12.3%.

License revenues

License revenues increased by $6.0 million, or 23.8%, to $31.1 million for the three months ended September 30, 2021, as compared to $25.1 million during the same period in Fiscal 2020 driven by higher demand and improved business and financial conditions of our licensees. The increased revenue was primarily from our licensing partners in North America, as this region continues to recover from the impacts of COVID-19.

License revenues increased by $24.8 million, or 48.3%, to $76.0 million for the nine months ended September 30, 2021, as compared to $51.2 million during the same period in Fiscal 2020 driven by higher demand and improved business and financial conditions of our licensees. The increased revenue was primarily from our licensing partners in North America, as this region continues to recover from the impacts of COVID-19.

Revenues from Corporate Other

Revenues from Corporate Other decreased by $37.0 million for the three months ended September 30, 2021, and by $107.0 million for the nine months ended September 30, 2021, as compared to the same periods in Fiscal 2020, primarily due to the sale of MyFitnessPal in December 2020. See Note 1 to our unaudited condensed consolidated financial statements for more details.

Gross Profit

Cost of goods sold consists primarily of product costs, inbound freight and duty costs, outbound freight costs, handling costs to make products floor-ready to customer specifications, royalty payments to endorsers based on a

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predetermined percentage of sales of selected products, and write downs for inventory obsolescence. In general, as a percentage of net revenues, we expect cost of goods sold associated with our apparel and accessories to be lower than that of our footwear. A limited portion of cost of goods sold is associated with digital subscription and advertising revenues, primarily website hosting costs, and no cost of goods sold is associated with our license revenues.

We include outbound freight costs associated with shipping goods to customers as cost of goods sold; however, we include the majority of outbound handling costs as a component of selling, general and administrative expenses. As a result, our gross profit may not be comparable to that of other companies that include outbound handling costs in their cost of goods sold. Outbound handling costs include costs associated with preparing goods to ship to customers and certain costs to operate our distribution facilities. These costs were $13.8 million and $21.2 million for the three months ended September 30, 2021 and 2020, respectively, and $63.3 million and $61.2 million for the nine months ended September 30, 2021 and 2020, respectively.

Gross profit increased by $101.8 million to $788.1 million for the three months ended September 30, 2021, as compared to $686.3 million during the same period in Fiscal 2020. Gross profit as a percentage of net revenues, or gross margin, increased by 310 basis points to 51.0% for the three months ended September 30, 2021, compared to 47.9% during the same period in Fiscal 2020.

This increase in gross margin was primarily driven by the following:

•approximately 400 basis points of pricing improvements driven by lower promotional activity within our direct-to-consumer channel, along with lower promotions and markdowns within our wholesale business; and

•approximately 120 basis points resulting from channel mix, primarily related to lower mix of off-price sales.

These increases were partially offset by the following decreases in gross margin:

•approximately 100 basis points related to the absence of MyFitnessPal, which was sold in December 2020; and

•approximately 90 basis points relating primarily to higher freight and logistic costs due to COVID-19 related supply chain pressures

Gross profit increased by $619.1 million to $2,085.6 million for the nine months ended September 30, 2021, as compared to $1,466.5 million during the same period in Fiscal 2020. Gross profit as a percentage of net revenues, or gross margin, increased 240 basis points to 50.2%, compared to 47.8% during the same period in Fiscal 2020.

This increase in gross margin was primarily driven by the following:

•approximately 380 basis points of pricing improvements driven by lower promotional activity within our direct-to-consumer channel along with lower promotions and markdowns within our wholesale channel; and

•approximately 50 basis points resulting from a benefit of foreign exchange impacts.

These increases were partially offset by the following decreases in gross margin:

•approximately 130 basis points related to the absence of MyFitnessPal, which was sold in December 2020; and

•approximately 40 basis points related to channel mix primarily due to a lower mix of e-commerce and a higher mix of off-price sales compared to last year, when this channel was essentially closed for a part of the period during the nine months ended September 30, 2020.

Through the remainder of Fiscal 2021, we expect gross margin will continue to benefit from pricing and changes in foreign currency, partially offset by increased freight and logistic expenses and the sale of MyFitnessPal, which carried a high gross margin rate.

Selling, General and Administrative Expenses

Our selling, general and administrative expenses consist of costs related to marketing, selling, product innovation and supply chain, and corporate services. We consolidate our selling, general and administrative expenses into two primary categories: marketing and other. The other category is the sum of our selling, product innovation and supply chain, and corporate services categories. The marketing category consists primarily of sports and brand marketing, media, and retail presentation. Sports and brand marketing includes professional, club and collegiate sponsorship agreements, individual athlete and influencer agreements, and providing and selling products

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directly to teams and individual athletes. Media includes digital, broadcast, and print media outlets, including social and mobile media. Retail presentation includes sales displays and concept shops and depreciation expense specific to our in-store fixture programs. Our marketing costs are an important driver of our growth.

Selling, general and administrative expenses increased by $45.8 million, or 8.3%, to $599.4 million for the three months ended September 30, 2021, as compared to $553.5 million during the same period in Fiscal 2020. Within selling, general and administrative expenses:

•Marketing costs increased $36.6 million to $167.3 million, as compared to $130.7 million during the same period in Fiscal 2020. The increase was primarily attributable to reduced marketing activity in the prior fiscal year due to the COVID-19 pandemic. As a percentage of net revenues, marketing costs increased to 10.8% from 9.1% in the prior fiscal year period.

•Other costs increased $9.3 million to $432.1 million, as compared to $422.8 million during the same period in Fiscal 2020. The increase was primarily driven by higher incentive compensation expenses and non salaried wages, and general increase in business activities in Fiscal 2021, as compared to the same period in Fiscal 2020. As a percentage of net revenues, other costs decreased to 28.0% from 29.5%.

As a percentage of net revenues, total selling, general and administrative expenses increased to 38.8% for the three months ended September 30, 2021, compared to 38.6% during the same period in Fiscal 2020.

Selling, general and administrative expenses increased by $72.9 million, or 4.6%, to $1,659.0 million for the nine months ended September 30, 2021, as compared to $1,586.2 million during the same period in Fiscal 2020. Within selling, general and administrative expense:

•Marketing costs increased $54.1 million to $444.6 million, as compared to $390.5 million during the same period in Fiscal 2020. The increase was primarily attributable to reduced marketing activity in the prior fiscal year due to the COVID-19 pandemic. This increase was partially offset by reduced rights fees for sports marketing assets and reductions in retail marketing within our wholesale channel. As a percentage of net revenues, marketing costs decreased to 10.7% due to increased revenues, from 12.7% in the prior fiscal year.

•Other costs increased $18.7 million to $1,214.4 million, as compared to $1,195.7 million during the same period in Fiscal 2020. The increase was primarily driven by higher incentive compensation, non salaried wages, and retail facility expenses, and general increase in business activities in Fiscal 2021, as compared to the same period in Fiscal 2020, which was more severely impacted by COVID-19. These increases were partially offset by incurring lower legal and depreciation expense. As a percentage of net revenues, other costs decreased to 29.2% from 38.9% during the same period in Fiscal 2020.

As a percentage of net revenues, selling, general and administrative expenses decreased to 39.9% as compared to 51.7% during the same period in Fiscal 2020.

Restructuring and Impairment Charges

Restructuring and impairment charges within our operating expenses were $16.7 million and $74.2 million for the three months ended September 30, 2021 and 2020, respectively. Refer to the "2020 Restructuring" section above for further discussion of the 2020 restructuring plan.

Restructuring and impairment charges within our operating expenses were $26.4 million and $549.6 million for the nine months ended September 30, 2021 and 2020, respectively. Included in the prior fiscal year was $135.4 million of long-lived asset and goodwill impairment charges, as well as a right of use asset impairment charge of $290.8 million relating to our flagship store in New York City.

Income (Loss) from Operations

Income from operations increased by $113.5 million to $172.1 million for the three months ended September 30, 2021, and increased by $1,069.4 million to $400.2 million for the nine months ended September 30, 2021. The increase in income from operations for both the three and nine month period was driven primarily by increased revenues along with significantly lower restructuring and impairment charges compared to the prior fiscal year.

Interest Expense, Net

Interest expense, net is primarily comprised of interest paid and accrued on our debt facilities, offset by interest income earned on our cash and cash equivalents.

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Interest expense, net decreased by $5.7 million to $9.3 million for the three months ended September 30, 2021, as compared to $15.0 million during the same period in Fiscal 2020. The decrease was primarily due to less interest on our Convertible Senior Notes as a result of our repurchase of $419.1 million aggregate principal amount of Convertible Senior Notes. See Note 5 to our unaudited condensed consolidated financial statements.

Interest expense, net increased by $4.5 million to $36.7 million for the nine months ended September 30, 2021, as compared to $32.3 million during the same period in Fiscal 2020. The increase was primarily due to the full year impact of interest expense associated with our Convertible Senior Notes issued in May 2020, offset by a reduction in interest expense on our Convertible Senior Notes as a result of our repurchase of $419.1 million in aggregate principal noted above. See Note 5 to our unaudited condensed consolidated financial statements.

Other Income (Expense)

Other income (expense), net primarily consists of unrealized and realized gains and losses on our foreign currency derivative financial instruments, and unrealized and realized gains and losses on adjustments that arise from fluctuations in foreign currency exchange rates relating to transactions generated by our international subsidiaries. Other income (expense), net also includes rent expense relating to lease assets held solely for sublet purposes, primarily the lease related to our New York City flagship store.

Other expense, net, increased by $22.3 million for the three months ended September 30, 2021, as compared to the same period in Fiscal 2020, primarily as a result of a $23.8 million loss we recognized upon the extinguishment of $169.1 million in principal amount of our Convertible Senior Notes. For more details see Note 5 to our unaudited condensed consolidated financial statements.

Other expense, net increased by $64.7 million for the nine months ended September 30, 2021 as compared to the same period in Fiscal 2020, primarily as a result of a $58.5 million loss we recognized upon the extinguishment of an aggregate $419.1 million in principal amount of our Convertible Senior Notes, an increase of $3.2 million associated with rent expense incurred in connection with our New York City flagship store and an increase of $4.2 million associated with changes in foreign exchange rates.

Income Tax Expense

Income tax expense increased by $22.7 million to $19.0 million during the three months ended September 30, 2021, as compared to an income tax benefit of $3.7 million during the same period in Fiscal 2020. For the three months ended September 30, 2021, our effective tax rate was 14.2% compared to (10.2)% for the same period in Fiscal 2020. The change in our effective tax rate was primarily driven by the proportion of earnings subject to tax in the United States as compared to foreign jurisdictions in each period, the recording of valuation allowance releases against current 2021 earnings forecasted in the United States, and discrete items during the three months ended September 30, 2020.

Income tax expense increased by $24.2 million to $38.9 million during the nine months ended September 30, 2021 as compared to $14.7 million during the same period in Fiscal 2020. For the nine months ended September 30, 2021, our effective tax rate was 13.5% compared to (2.1)% for the same period in Fiscal 2020. The change in our effective tax rate was primarily driven by the recording of valuation allowances against the majority of 2020 losses forecast in the United States, against all of the 2020 losses forecast in China, and discrete items, including the recording of valuation allowances on certain previously recognized deferred tax assets in the United States and China during the nine months ended September 30, 2020.

Income (Loss) from Equity Method Investments

Loss from equity method investment was $0.9 million for the three months ended September 30, 2021, as compared to a loss of $1.2 million during the same period in Fiscal 2020. See Note 2 to our unaudited condensed consolidated financial statements, under Equity Method Investment, for more details.

Income from equity method investment increased by $7.9 million to $1.0 million during the nine months ended September 30, 2021, as compared to a loss of $6.9 million during the same period in Fiscal 2020. This increase was primarily due to a $3.7 million impairment of our equity method investment in our Japanese licensee, Dome, recorded in the prior fiscal year.

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SEGMENT RESULTS OF OPERATIONS

Our operating segments are based on how our Chief Operating Decision Maker (“CODM”) makes decisions about allocating resources and assessing performance. Our segments are defined by geographic regions, including North America, EMEA, Asia-Pacific, and Latin America.

Prior to the sale of MyFitnessPal in December 2020, our CODM also received discrete financial information for our Connected Fitness Segment. However, beginning January 1, 2021, we no longer report Connected Fitness as a discrete reportable operating segment (see Note 1 to our unaudited condensed consolidated financial statements). All prior period balances have been recast to conform to current period presentation. Such reclassifications did not affect total consolidated revenues, consolidated income from operations or consolidated net income.

We exclude certain corporate costs from our segment profitability measures. We report these costs within Corporate Other, which is designed to provide increased transparency and comparability of our operating segments performance. The costs included within Corporate Other consists largely of revenue and costs related to our MMR platforms, as well as general and administrative expenses not allocated to an operating segment, including expenses associated with centrally managed departments such as global marketing, global IT, global supply chain and innovation, and other corporate support functions; costs related to our global assets and global marketing, costs related to our headquarters; restructuring and restructuring related charges; and certain foreign currency hedge gains and losses.

The net revenues and operating income (loss) associated with our segments are summarized in the following tables.

Three Months Ended September 30, 2021 Compared to Three Months Ended September 30, 2020

Net revenues by segment and Corporate Other are summarized below: 

	Three Months Ended September 30,
(In thousands)	2021		2020		$ Change		% Change
North America	$	1,035,862	$	962,565	$	73,297	7.6	%
EMEA	241,201		210,111		31,090		14.8	%
Asia-Pacific	211,950		178,895		33,055		18.5	%
Latin America	56,380		44,338		12,042		27.2	%
Corporate Other (1)	139		37,112		(36,973)		(99.6)	%
Total net revenues	$	1,545,532	$	1,433,021	$	112,511	7.9	%

(1) Corporate Other primarily includes foreign currency hedge gains and losses related to revenues generated by entities within our operating segments but managed through our central foreign exchange risk management program. Effective January 1, 2021, included within Corporate Other is the operating results of the remaining Connected Fitness business consisting of MMR for Fiscal 2021 and the entire Connected Fitness business for Fiscal 2020. All prior periods were recast to conform to the current period presentation. Such reclassifications did not affect total consolidated revenues, consolidated income from operations or consolidated net income (see Note 1 to our financial statements).

The increase in total net revenues for the three months ended September 30, 2021, compared to the same period in Fiscal 2020 was driven by the following:

•Net revenues in our North America region increased $73.3 million, or 7.6%, to $1,035.9 million for the three months ended September 30, 2021, as compared to $962.6 million during the same period in Fiscal 2020. This increase was primarily driven by growth in our retail business within our direct-to-consumer channel. When compared to the same period in Fiscal 2019, net revenues in our North America region increased by 2.0%.

•Net revenues in our EMEA region increased $31.1 million, or 14.8%, to $241.2 million for the three months ended September 30, 2021, as compared to $210.1 million during the same period in Fiscal 2020. This increase was primarily driven by growth within our wholesale channel. When compared to the same period in Fiscal 2019, net revenues in our EMEA region increased by 49.8%.

•Net revenues in our Asia-Pacific region increased $33.1 million, or 18.5%, to $212.0 million for the three months ended September 30, 2021, as compared to $178.9 million during the same period in Fiscal 2020. This increase was primarily driven by growth within our wholesale channel. When compared to the same period in Fiscal 2019, net revenues in our Asia-Pacific region increased by 36.8%.

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•Net revenues in our Latin America region increased $12.0 million, or 27.2%, to $56.4 million for the three months ended September 30, 2021, as compared to $44.3 million during the same period in Fiscal 2020. This increase was primarily driven by growth in our wholesale channel, partially offset by a decrease in our direct-to-consumer channels, primarily related to a decline in our e-commerce business. When compared to the same period in Fiscal 2019, net revenues in our Latin America region increased by 8.0%.

•The decrease in Corporate Other for the three months ended September 30, 2021, compared to the same period in Fiscal 2020 is primarily due to the sale of MyFitnessPal in December 2020.

Nine Months Ended September 30, 2021 Compared to Nine Months Ended September 30, 2020

Net revenues by segment and Corporate Other are summarized below:

	Nine Months Ended September 30,
(In thousands)	2021		2020		$ Change		% Change
North America	$	2,747,082	$	2,021,247	$	725,835	35.9	%
EMEA	642,308		437,140		205,168		46.9	%
Asia-Pacific	614,539		397,846		216,693		54.5	%
Latin America	151,203		108,573		42,630		39.3	%
Corporate Other (1)	(871)		106,095		(106,966)		(100.8)	%
Total net revenues	$	4,154,261	$	3,070,901	$	1,083,360	35.3	%

(1) Corporate Other primarily includes foreign currency hedge gains and losses related to revenues generated by entities within our operating segments but managed through our central foreign exchange risk management program. Effective January 1, 2021, included within Corporate Other is the operating results of the remaining Connected Fitness business consisting of MMR for Fiscal 2021 and the entire Connected Fitness business for Fiscal 2020. All prior period balances were recast to conform to the current period presentation. Such reclassifications did not affect total consolidated revenues, consolidated income from operations or consolidated net income (see Note 1 to our financial statements).

Net revenues increased across each of our regional operating segments due to increased demand, as compared to the same period in in Fiscal 2020, as we experienced significant disruptions in Fiscal 2020 related to COVID-19. In addition to the impact of COVID-19, the increase in total net revenues for the nine months ended September 30, 2021, compared to the same period in 2020, was driven by the following:

•Net revenues in our North America region increased $725.8 million, or 35.9%, to $2,747.1 million for the nine months ended September 30, 2021, as compared to $2,021.2 million during the same period in Fiscal 2020. This increase was primarily driven by growth within both our wholesale and direct-to-consumer channels. When compared to the same period in Fiscal 2019, net revenues in our North America region increased by 2.7%.

•Net revenues in our EMEA region increased $205.2 million, or 46.9%, to $642.3 million for the nine months ended September 30, 2021, as compared to $437.1 million during the same period in Fiscal 2020. This increase was primarily driven by growth within both our wholesale and direct-to-consumer channels.The increase in demand was also due to timing shifts related to changes in customer order flow and supply chain timing from the fourth quarter of Fiscal 2020 to the first quarter of Fiscal 2021. When compared to the same period in Fiscal 2019, net revenues in our EMEA region increased by 45.8%.

•Net revenues in our Asia-Pacific region increased $216.7 million, or 54.5%, to $614.5 million for the nine months ended September 30, 2021, as compared to $397.8 million during the same period in Fiscal 2020. This increase was primarily driven by growth within both our wholesale and direct-to-consumer channels. The increase in demand was also due to timing shifts related to changes in customer order flow and supply chain timing from the fourth quarter of Fiscal 2020 to the first quarter of Fiscal 2021. When compared to the same period in Fiscal 2019, net revenues in our Asia-Pacific region increased by 35.6%.

•Net revenues in our Latin America region increased $42.6 million, or 39.3%, to $151.2 million for the nine months ended September 30, 2021, as compared to $108.6 million during the same period in Fiscal 2020. This increase was primarily driven by growth within our wholesale channel partially offset by a decrease in our direct-to-consumer channel as we have moved to a distributor operating model for

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certain countries within this region. When compared to the same period in Fiscal 2019, net revenues in our Latin America region increased by 7.2%.

•The decrease in Corporate Other for the nine months ended September 30, 2021, compared to the same period in Fiscal 2020 is primarily due to the sale of MyFitnessPal in December 2020.

Three Months Ended September 30, 2021 Compared to Three Months Ended September 30, 2020

Operating income (loss) by segment and Corporate Other is summarized below:

	Three Months Ended September 30,
(In thousands)	2021		2020		$ Change		% Change
North America	$	292,367	$	224,593	$	67,774	30.2	%
EMEA	41,772		40,834		938		2.3	%
Asia-Pacific	40,529		19,248		21,281		110.6	%
Latin America	10,831		1,802		9,029		501.1	%
Corporate Other	(213,435)		(227,907)		14,472		6.3	%
Total operating income	$	172,064	$	58,570	$	113,494	193.8	%

The increase in total operating income was driven by the following:

•Operating income in our North America region increased $67.8 million to $292.4 million for the three months ended September 30, 2021, as compared to $224.6 million during the same period in Fiscal 2020. This increase in operating income was due to increases in net revenues discussed above, along with improvements in gross margin due to improvements in pricing related to lower markdowns and reduced promotional activity, as well as improved sales mix with lower liquidation. These increases were partially offset by an increase in selling, general and administrative costs primarily due to increased compensation expense and increased digital marketing spend.

•Operating income in our EMEA region increased $0.9 million to $41.8 million for the three months ended September 30, 2021, as compared to $40.8 million during the same period in Fiscal 2020. This increase in operating income was due to increases in net revenues discussed above, along with improved gross margins resulting from a more favorable channel mix. These increases were partially offset by an increase in marketing-related expenses.

•Operating income in our Asia-Pacific region increased $21.3 million to $40.5 million for the three months ended September 30, 2021, as compared to $19.2 million during the same period in Fiscal 2020, This increase in operating income was due to increases in net revenues discussed above, along with improvements in gross margin primarily due to lower promotional activity. These increases were partially offset by increased marketing-related expenses.

•Operating income in our Latin America region increased $9.0 million to $10.8 million for the three months ended September 30, 2021, as compared to $1.8 million during the same period in Fiscal 2020. This increase in operating income was due to increases in net revenues discussed above, along with improvements in gross margin from lower promotional activity and markdowns, as well as a decrease in selling, general and administrative costs.

•Operating loss in our Corporate Other segment decreased $14.5 million to $213.4 million for the three months ended September 30, 2021, as compared to $227.9 million during the same period in Fiscal 2020. The decrease in operating loss was primarily due to lower restructuring charges incurred in Fiscal 2021 as compared to Fiscal 2020, partially offset by the sale of MyFitnessPal in December 2020.

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Nine Months Ended September 30, 2021 Compared to Nine Months Ended September 30, 2020

Operating income (loss) by segment and Corporate Other is summarized below:

	Nine Months Ended September 30,
(In thousands)	2021		2020		$ Change		% Change
North America	$	728,698	$	251,579	$	477,119	189.6	%
EMEA	108,350		43,840		64,510		147.1	%
Asia-Pacific	111,088		(30,040)		141,128		469.8	%
Latin America	18,289		(50,756)		69,045		136.0	%
Corporate Other	(566,266)		(883,907)		317,641		35.9	%
Total operating income (loss)	$	400,159	$	(669,284)	$	1,069,443	159.8	%

The increase in total operating income was driven by the following:

•Operating income in our North America region increased $477.1 million to $728.7 million for the nine months ended September 30, 2021, as compared to $251.6 million during the same period in Fiscal 2020. This increase in operating income was due due to increases in net revenues discussed above, along with improvements in gross margin due to pricing improvements, including lower promotional activity and markdowns, as well as improved sales mix due to lower liquidations. Additionally, North America incurred lower bad debt expense in the nine months ended September 30, 2021 and was impacted by long lived asset impairment charges recorded in the prior year. These decreases were partially offset by increased incentive compensation expense, non-salaried wages, as well as increased marketing-related expenses.

•Operating income in our EMEA region increased $64.5 million to $108.4 million for the nine months ended September 30, 2021, as compared to $43.8 million during the same period in Fiscal 2020. This increase in operating income was due to increases in net revenues discussed above, along with improved gross margins due to better channel mix. These improvements were partially offset by an increase in marketing-related expenses as well as increased distribution related expenses associated with larger sales volume.

•Operating income in our Asia-Pacific region increased $141.1 million to $111.1 million for the nine months ended September 30, 2021, as compared to a loss of $30.0 million during the same period in Fiscal 2020. This increase in operating income was due to increases in net revenues discussed above, along with improvements in gross margin due to pricing improvements driven primarily by lower promotional activity. Additionally, operating income in our Asia-Pacific region was impacted by long-lived asset impairment charges recorded in the prior year.

•Operating income in our Latin America region increased $69.0 million to $18.3 million for the nine months ended September 30, 2021, as compared to a loss of $50.8 million during the same period in Fiscal 2020. This increase in operating income was due to increases in net revenues discussed above, along with improved gross margin due to lower promotional activities, and from the recording of long-lived asset impairment charges in the first quarter of Fiscal 2020.

•Operating loss in our Corporate Other non-operating segment decreased $317.6 million to $566.3 million for the nine months ended September 30, 2021, as compared to $883.9 million during the same period in Fiscal 2020. The decrease in operating loss was primarily due to lower restructuring and impairment charges incurred in Fiscal 2021 as compared to Fiscal 2020, partially offset by the sale of MyFitnessPal in December 2020.

FINANCIAL POSITIONS, CAPITAL RESOURCES AND LIQUIDITY

Our cash requirements have principally been for working capital and capital expenditures. We fund our working capital, primarily inventory, and capital investments from cash flows from operating activities, cash and cash equivalents on hand, and borrowings available under our credit and long term debt facilities. Our working capital requirements generally reflect the seasonality in our business as we historically recognize the majority of our net

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revenues in the last two quarters of the calendar year. Our capital investments have generally included expanding our in-store fixture and branded concept shop program, improvements and expansion of our distribution and corporate facilities, leasehold improvements to our brand and factory house stores, and investment and improvements in information technology systems. Our inventory strategy is focused on continuing to meet consumer demand while improving our inventory efficiency over the long term by putting systems and processes in place to improve our inventory management. These systems and processes are designed to improve our forecasting and supply planning capabilities. In addition to systems and processes, key areas of focus that we believe enhance inventory performance are added discipline around the purchasing of product, production lead time reduction, and better planning and execution in selling of excess inventory through our factory house stores and other liquidation channels.

As of September 30, 2021, we had $1.3 billion of cash and cash equivalents. We believe our cash and cash equivalents on hand, cash from operations, our ability to reduce our expenditures as needed, borrowings available to us under our amended credit agreement, our ability to access the capital markets, and other financing alternatives are adequate to meet our liquidity needs and capital expenditure requirements for at least the next twelve months. In addition, from time to time, based on prevailing market conditions, our liquidity requirements, contractual restrictions and other factors and subject to compliance with applicable laws and regulations, we may seek to utilize cash on hand, borrowings or raise capital to retire, repurchase or redeem our debt securities, repay debt, or otherwise enter into similar transactions to support our capital structure and business or utilize excess cash flow on a strategic basis. For example, in May 2021 and August 2021, we entered in Exchange Agreements pursuant to which we repurchased $250 million and approximately $169.1 million, respectively, aggregate principal amount of our Convertible Senior Notes in exchange for a combination of cash and shares for our Class C Common Stock.

Our credit agreement limits our ability to incur additional indebtedness. We currently expect to be able to comply with these requirements without pursuing additional sources of financing to support our liquidity over the next twelve months.

If the COVID-19 pandemic persists in a material way or there are unexpected material impacts to our business in future periods from COVID-19 and we need to raise or conserve additional cash to fund our operations, we may consider additional alternatives similar to those we used in Fiscal 2020, including further reducing our expenditures, changing our investment strategies, negotiating payment terms with our customers and vendors, reductions in compensation costs, including through temporary reductions in pay and layoffs, and limiting certain marketing and capital expenditures. In addition, we may seek alternative sources of liquidity, including but not limited to, accessing the capital markets, sale leaseback transactions or other sales of assets, or other alternative financing measures. However, instability in, or tightening of the capital markets, could adversely affect our ability to access the capital markets on terms acceptable to us or at all. Although we believe we have adequate sources of liquidity over the long term, a prolonged or more severe economic recession or a slow recovery could adversely affect our business and liquidity.

Refer to our “Risk Factors” section included in Item 1A, "Risk Factors" in our Annual Report on Form 10-K for Fiscal 2020.

Cash Flows

The following table presents the major components of our cash flows provided by and used in operating, investing and financing activities for the periods presented:

	Nine Months Ended September 30,
(In thousands)	2021		2020
Net cash provided by (used in):
Operating activities	$	209,868	$	(249,707)
Investing activities	(56,247)		(110,487)
Financing activities	(417,442)		436,323
Effect of exchange rate changes on cash and cash equivalents	1,708		2,398
Net increase (decrease) in cash and cash equivalents	$	(262,113)	$	78,527

Cash flows used in operating activities

Cash flows provided by operating activities increased by $459.6 million, as compared to the same period in Fiscal 2020, primarily driven by an increase in net income, before the impact of non-cash items, of $528.8 million,

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partially offset by a decrease from changes in working capital of $69.2 million. The decrease from changes in working capital were primarily due to decreases of:

•$425.0 million resulting from changes in accrued expenses and other liabilities, primarily due to the commencement of the operating lease relating to our New York City flagship store which was included in Fiscal 2020;

•$94.2 million resulting from changes in accounts receivable primarily due to our previously disclosed changes to customer order flow and supply chain timing from the fourth quarter of Fiscal 2020 to the first quarter of Fiscal 2021, and an increase in net revenues of $984.0 million;

•$68.1 million resulting from changes in prepaid expenses and other assets, primarily due to increased spending in marketing and information technology-related initiatives; and

•$54.9 million resulting from changes in accounts payable.

These decreases in working capital were partially offset by increases in working capital of:

•$340.3 million resulting from changes in other non-current assets, primarily due to the commencement of our New York City flagship store and the related operating lease ROU asset which was included in Fiscal 2020; and

•$224.1 million resulting from changes in inventories on account of better inventory management and demand constraints.

Investing Activities

Cash flows used in investing activities decreased by $54.2 million, as compared to the same period in Fiscal 2020, primarily as a result of $38.8 million of acquisition-related activity that occurred in Fiscal 2020.

Financing Activities

Cash flows used in financing activities decreased by $853.8 million, as compared to the same period in Fiscal 2020. During the nine months ended September 30, 2021, we used approximately $417.5 million in cash for financing activities, whereas during the same period in Fiscal 2020, we had cash inflow of $436.3 million from financing activities. The cash outflow of $417.5 million was primarily related to approximately $506.3 million paid to certain holders for the exchange of $419.1 million in aggregate principal amount of our 1.50% convertible senior notes (the "Convertible Senior Notes"). Concurrently with these exchanges we entered into agreements to terminate a portion of the capped call transactions previously entered into in connection with our initial offering of the Convertible Senior Notes and received approximately $91.7 million from the option counterparties in connection with such termination agreements. For more details, see discussion below under "1.50% Convertible Senior Notes".

Capital Resources

Credit Facility

On March 8, 2019, we entered into an amended and restated credit agreement by and among us, as borrower, JPMorgan Chase Bank, N.A., as administrative agent, and the other lenders and arrangers party thereto (the “credit agreement”). The credit agreement has a term of five years, maturing in March 2024, with permitted extensions under certain circumstances. In May 2020, we entered into an amendment to the credit agreement (the “first amendment”), pursuant to which the prior revolving credit commitments were reduced from $1.25 billion to $1.1 billion of borrowings. Subsequently, in May 2021, we entered into a second amendment to the credit agreement (the "second amendment" and, the credit agreement as amended by the first amendment and the second amendment, the "amended credit agreement" or the "revolving credit facility"). The second amendment provides for certain changes to our covenants and decreases to certain applicable rates effected by the first amendment. Where the first amendment previously provided for suspensions of and adjustments to our existing interest coverage covenant and leverage covenant (each as defined below), and further required us to maintain a specific amount of minimum liquidity during certain quarters, the second amendment provided that these financial covenants became effective again as of March 31, 2021 and removed the minimum liquidity covenant. The second amendment also (i) decreases the interest rate margins that were previously provided for under the first amendment; (ii) reverses limitations effected by the first amendment on expansions of and extensions of the maturity of the revolving credit facility during the covenant suspension period; (iii) removes additional limitations on the availability of certain exceptions to the negative covenants, including the restricted payments covenant, that were imposed during the covenant suspension period; and (iv) provides mechanics relating to a transition away from LIBOR as a benchmark

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interest rate and the replacement of LIBOR by a replacement alternative benchmark rate or mechanism for loans made in U.S. Dollars and non-U.S. Dollar currencies.

As of September 30, 2021, December 31, 2020 and September 30, 2020, there were no amounts outstanding under the revolving credit facility.

At our 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 we seek 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, 2021, there was $4.4 million of letters of credit outstanding (December 31, 2020 and September 30, 2020 had $4.3 million and $15.5 million letters of credit outstanding, respectively).

Our obligations 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 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 contains negative covenants that, subject to significant exceptions, limit our 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.

We are 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 we are 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, 2021, we were 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.

Borrowings under the amended credit agreement bear interest at a rate per annum equal to, at our option, either (a) an alternate base rate, (b) a rate based on the rates applicable for deposits in the interbank market for U.S. Dollars (“adjusted LIBOR”), (c) a rate based on the rates applicable for deposits in the interbank market for Japanese Yen ("adjusted TIBOR"), (d) a rate based on the rates applicable for deposits in the interbank market for Canadian Dollars ("adjusted CDOR"), or (e) a rate based on the rates applicable for deposits in the interbank market for Euro ("adjusted EURIBOR"), 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 1.25% to 1.75% for adjusted LIBOR, adjusted TIBOR, adjusted CDOR and adjusted EURIBOR loans and 0.25% to 0.75% for alternate base rate loans. We 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.

The weighted average interest rate under the revolving credit facility borrowings was 2.1% and 2.3% during the three and nine months ended September 30, 2020, respectively. There were no borrowings outstanding during the nine months ended September 30, 2021. As of September 30, 2021, the commitment fee was 25.0 basis points.

1.50% Convertible Senior Notes

In May 2020, we issued $500.0 million aggregate principal amount of 1.50% convertible senior notes due 2024 (the “Convertible Senior Notes”). The Convertible Senior Notes bear interest at the rate of 1.50% per annum, payable semiannually in arrears on June 1 and December 1 of each year, beginning December 1, 2020. The

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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 net proceeds from the offering (including the net proceeds from the exercise of the over-allotment option) was $488.8 million, after deducting the initial purchasers’ discount and estimated offering expenses that we paid, of which we used $47.9 million to pay the cost of the capped call transactions described below. We utilized $439.9 million to repay indebtedness that was outstanding under our revolving credit facility at the time, and to pay related fees and expenses.

The Convertible Senior Notes are not secured and are not guaranteed by any of our 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 us or any of our subsidiaries.

In May 2021, we entered into exchange agreements with certain holders of the Convertible Senior Notes (the "first exchanging holders"), who agreed to exchange $250.0 million in aggregate principal amount of the Convertible Senior Notes for cash and/or shares of our Class C Common Stock, plus payment for accrued and unpaid interest (the "First Exchange"). In connection with the First Exchange, we paid approximately $300.0 million cash and issued approximately 11.1 million shares of the Company's Class C Common Stock to the first exchanging holders. In August 2021, we entered into additional exchange agreements with certain holders of the Convertible Senior Notes (the "second exchanging holders"), who agreed to exchange approximately $169.1 million in aggregate principal amount of the Convertible Senior Notes for cash and/or shares of our Class C Common Stock, plus payment for accrued an unpaid interest (the "Second Exchange" and, together with the First Exchange, the "Exchanges"). In connection with the Second Exchange, we paid approximately $207.0 million cash and issued approximately 7.7 million shares of our Class C Common Stock to the second exchanging holders. In connection with the Exchanges, we recognized a loss on debt extinguishment of approximately $23.8 million and $58.5 million for the three and nine months ended September 30, 2021, respectively, which has been recorded within Other Income (Expense), net on our unaudited condensed consolidated statement of operations. Following the Exchanges, approximately $80.9 million aggregate principal amount of the Convertible Senior Notes remain outstanding.

The Convertible Senior Notes are convertible into cash, shares of our Class C Common Stock or a combination of cash and shares of Class C Common Stock, at our election, as described further below. The initial conversion rate is 101.8589 shares of our 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 our 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 day of the measurement period was less than 98% of the product of the last reported sale price of our Class C Common Stock and the conversion rate on each such trading day;

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

•if we call 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.

On or after December 6, 2022, we may redeem for cash all or any part of the Convertible Senior Notes, at our option, if the last reported sale price of our 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

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date on which we provide 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 we undergo 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 us 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, we 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 our Class C Common Stock upon any conversion of Convertible Senior Notes and/or offset any cash payments we are 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 our Class C Common Stock, representing a premium of 75% above the last reported sale price of our Class C Common Stock on May 21, 2020, and is subject to certain adjustments under the terms of the capped call transactions.

In May 2021 and August 2021, concurrently with the Exchanges, we entered into, with each of the option counterparties, termination agreements relating to a number of options corresponding to the number of Convertible Senior Notes exchanged. Pursuant to such termination agreements, each of the option counterparties paid us a cash settlement amount in respect of the portion of capped call transactions being terminated. We received approximately $53.0 million and $38.6 million in connection with such termination agreements related to the First Exchange and the Second Exchange, respectively.

The Convertible Senior Notes contain a cash conversion feature, and as a result, we have separated it into liability and equity components. We valued the liability component based on our borrowing rate for a similar debt instrument that does not contain a conversion feature. The equity component, which is recognized as a debt discount, was valued as the difference between the face value of the Convertible Senior Notes and the fair value of the liability component.

In connection with the Convertible Senior Notes issuance, we incurred deferred financing costs of $12.3 million, primarily related to fees paid to the initial purchasers of the offering, as well as legal and accounting fees. These costs were allocated on a pro rata basis, with $10.0 million allocated to the debt component and $2.2 million allocated to the equity component.

The debt discount and the debt portion of the deferred financing costs are being amortized to interest expense over the term of the Convertible Senior Notes using the effective interest rate method. The effective interest rate for the three months ended September 30, 2021 was 6.8%.

3.250% Senior Notes

In June 2016, we issued $600.0 million aggregate principal amount of 3.250% senior unsecured notes due June 15, 2026 (the “Senior Notes”). The proceeds were used to pay down amounts outstanding under the revolving credit facility, at the time. Interest is payable semi-annually on June 15 and December 15 beginning December 15, 2016. Prior to March 15, 2026 (three months prior to the maturity date of the Notes), we may redeem some or all of the Senior Notes at any time or from time to time at a redemption price equal to the greater of 100% of the principal amount of the Senior Notes to be redeemed or a "make-whole" amount applicable to such Senior Notes as described in the indenture governing the Senior Notes, plus accrued and unpaid interest to, but excluding, the redemption date.

The indenture governing the Senior Notes contains covenants, including limitations that restrict our ability and the ability of certain of our subsidiaries to create or incur secured indebtedness and enter into sale and leaseback transactions and our ability to consolidate, merge or transfer all or substantially all of our properties or assets to another person, in each case subject to material exceptions described in the indenture.

CONTRACTUAL COMMITMENTS AND CONTINGENCIES

Other than the borrowings and repayments disclosed above in the "Capital Resources" section and changes which occur in the normal course of business, there were no significant changes to the contractual obligations

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reported in our Annual Report on Form 10-K for Fiscal 2020, as updated in our Form 10-Q for the quarter ended September 30, 2021.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

Our consolidated financial statements have been prepared in accordance with U.S. GAAP. To prepare these financial statements, we must make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, as well as the disclosures of contingent assets and liabilities. Actual results could be significantly different from these estimates. We believe the following addresses the critical accounting policies that are necessary to understand and evaluate our reported financial results.

Our significant accounting policies are described in Note 2 of the audited consolidated financial statements included in our Annual Report on Form 10-K for Fiscal 2020. The SEC suggests companies provide additional disclosure on those accounting policies considered most critical. The SEC considers an accounting policy to be critical if it is important to our financial condition and results of operations and requires significant judgments and estimates on the part of management in its application. Our estimates are often based on complex judgments, probabilities and assumptions that management believes to be reasonable, but that are inherently uncertain and unpredictable. It is also possible that other professionals, applying reasonable judgment to the same facts and circumstances, could develop and support a range of alternative estimated amounts. For a complete discussion of our critical accounting policies, see the “Critical Accounting Policies” section of the MD&A in our Annual Report on Form 10-K for Fiscal 2020. Other than adoption of recent accounting standards as discussed in Note 2 of our unaudited condensed consolidated financial statements, there were no significant changes to our critical accounting policies during the nine months ended September 30, 2021.

Recently Issued Accounting Standards

Refer to Note 2 of our unaudited condensed consolidated financial statements, included in this Form 10-Q, for our assessment of recently issued accounting standards.

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

There have been no significant changes to our market risk since December 31, 2020. For a discussion of our exposure to market risk, refer to our Annual Report on Form 10-K for Fiscal 2020.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Our management has evaluated, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, the effectiveness of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the period covered by this report. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures are effective in ensuring that information required to be disclosed in our Exchange Act reports is (1) recorded, processed, summarized and reported in a timely manner and (2) accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

Changes in Internal Controls

We have assessed the impact on changes to our internal controls over financial reporting, and conclude that there have been no changes in our internal control over financial reporting, as defined in Exchange Act Rules 13a-15(f) and 15d-15(f), during the most recent fiscal quarter that have materially affected, or that are reasonably likely to materially affect our internal controls over financial reporting. We have not experienced any material impact to our internal controls over financial reporting despite the fact that a significant number of our employees are working remotely due to the COVID-19 pandemic. We continue to monitor and assess impacts of the COVID-19 pandemic on our control environment and control activities in order to minimize the impact on the design and operating effectiveness of our controls.

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PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

From time to time, we are involved in litigation and other proceedings, including matters related to commercial and intellectual property, as well as trade, regulatory and other claims related to our business. See Note 6 to our unaudited condensed consolidated financial statements for information on certain legal proceedings, which is incorporated by reference herein.

ITEM 1A. RISK FACTORS

Our results of operations and financial condition could be adversely affected by numerous risks. In addition to the other information in this Quarterly Report on Form 10-Q, you should carefully consider the risk factors discussed in Part I, Item 1A, "Risk Factors" in our Annual Report on Form 10-K for Fiscal 2020. These are not the only risks and uncertainties facing us. Additional risks not currently known to us or that we currently believe are immaterial may also negatively impact our business, financial condition, results of operations and future prospects.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Recent Sales of Unregistered Equity Securities

On August 19, 2021, we entered into exchange agreements with certain holders (the "second exchanging holders") of our 1.50% convertible senior notes due 2024 (the "Convertible Senior Notes"), who agreed to exchange approximately $169.1 million in aggregate principal amount of the Convertible Senior Notes for cash and/or shares of our Class C Common Stock, plus payment for accrued and unpaid interest (the "Second Exchange"). In connection with the Second Exchange, we issued 7,698,223 shares of our Class C Common Stock and paid approximately $207.0 million cash to the second exchanging holders. The shares of our Class C Common Stock issued in connection with the Second Exchange were not registered under the Securities Act of 1933, as amended (the "Securities Act"), and were issued in reliance on the exemption from the registration requirements thereof provided by Section 4(a)(2) of the Securities Act in a transaction by an issuer not involving a public offering. Additionally, concurrently with the Second Exchange, we entered into agreements to terminate a portion of the capped call transactions previously entered into in connection with our initial offering of the Convertible Senior Notes and received approximately $38.6 million in aggregate from the option counterparties in connection with such termination agreements. See Note 5 to our unaudited condensed consolidated financial statements for more information regarding the Second Exchange.

ITEM 6. EXHIBITS

Exhibit No.
10.01	Form of Termination Agreement, dated August 19, 2021, by and between the Company and the applicable capped call counterparty (incorporated by reference to Exhibit 10.1 of the Company's Current Report on Form 8-K filed on August 19, 2021).
31.01	Section 302 Chief Executive Officer Certification
31.02	Section 302 Chief Financial Officer Certification
32.01	Section 906 Chief Executive Officer Certification
32.02	Section 906 Chief Financial Officer Certification
101.INS	XBRL Instance Document - The instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document
101.SCH	XBRL Taxonomy Extension Schema Document
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	XBRL Taxonomy Extension Label Linkbase Document
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document
104	Cover Page Interactive Data File (embedded within the Inline XBRL document)

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

UNDER ARMOUR, INC.
By:	/s/ David E. Bergman
	David E. Bergman
	Chief Financial Officer

Date: November 4, 2021

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EX-31.01

Exhibit 31.01

Certification of Chief Executive Officer

Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Patrik Frisk, certify that:

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

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

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

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

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

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

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

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

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

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

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

Date: November 4, 2021

/s/ PATRIK FRISK

Patrik Frisk

Chief Executive Officer and President Principal Executive Officer

EX-31.02

Exhibit 31.02

Certification of Chief Financial Officer

Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, David E. Bergman, certify that:

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

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

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

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

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

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

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

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

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

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

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

Date: November 4, 2021

/s/ DAVID E. BERGMAN

David E. Bergman

Chief Financial Officer Principal Financial Officer

EX-32.01

Exhibit 32.01

Certification of Chief Executive Officer

Pursuant to 18 U.S.C. Section 1350, as created by Section 906 of the Sarbanes-Oxley Act of 2002, the undersigned officer of Under Armour, Inc. (the “Company”) hereby certifies, to such officer's knowledge, that:

(i) the quarterly report on Form 10-Q of the Company for the period ended September 30, 2021 (the “Report”) fully complies with the requirements of Section 13(a) or Section 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and

(ii) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: November 4, 2021

/s/ PATRIK FRISK

Patrik Frisk

Chief Executive Officer and President Principal Executive Officer

A signed original of this written statement required by Section 906 of the Sarbanes-Oxley Act of 2002 has been provided to Under Armour, Inc. and will be retained by Under Armour, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.02

Exhibit 32.02

Certification of Chief Financial Officer

Pursuant to 18 U.S.C. Section 1350, as created by Section 906 of the Sarbanes-Oxley Act of 2002, the undersigned officer of Under Armour, Inc. (the “Company”) hereby certifies, to such officer's knowledge, that:

(i) the quarterly report on Form 10-Q of the Company for the period ended September 30, 2021 (the “Report”) fully complies with the requirements of Section 13(a) or Section 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and

(ii) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: November 4, 2021

/s/ DAVID E. BERGMAN

David E. Bergman

Chief Financial Officer Principal Financial Officer

A signed original of this written statement required by Section 906 of the Sarbanes-Oxley Act of 2002 has been provided to Under Armour, Inc. and will be retained by Under Armour, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

XML

Cover Page - shares	9 Months Ended
	Sep. 30, 2021	Oct. 31, 2021
Document Information [Line Items]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Sep. 30, 2021
Document Transition Report	false
Entity File Number	001-33202
Entity Registrant Name	UNDER ARMOUR, INC.
Entity Incorporation, State or Country Code	MD
Entity Tax Identification Number	52-1990078
Entity Address, Address Line One	1020 Hull Street
Entity Address, City or Town	Baltimore
Entity Address, State or Province	MD
Entity Address, Postal Zip Code	21230
City Area Code	410
Local Phone Number	454-6428
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Amendment Flag	false
Document Fiscal Year Focus	2021
Document Fiscal Period Focus	Q3
Entity Central Index Key	0001336917
Current Fiscal Year End Date	--12-31
Class A Common Stock
Document Information [Line Items]
Title of 12(b) Security	Class A Common Stock
Trading Symbol	UAA
Security Exchange Name	NYSE
Entity Common Stock, Shares Outstanding		188,645,598
Class B Convertible Common Stock
Document Information [Line Items]
Entity Common Stock, Shares Outstanding		34,450,000
Class C Common Stock
Document Information [Line Items]
Title of 12(b) Security	Class C Common Stock
Trading Symbol	UA
Security Exchange Name	NYSE
Entity Common Stock, Shares Outstanding		253,018,596

XML

Unaudited Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Sep. 30, 2021	Dec. 31, 2020	Sep. 30, 2020
Current assets
Cash and cash equivalents	$ 1,253,706	$ 1,517,361	$ 865,609
Accounts receivable, net	735,779	527,340	806,916
Inventories	837,740	895,974	1,056,845
Prepaid expenses and other current assets, net	300,719	282,300	243,971
Total current assets	3,127,944	3,222,975	2,973,341
Property and equipment, net	601,700	658,678	680,871
Operating lease right-of-use assets	469,638	536,660	560,146
Goodwill	498,166	502,214	493,631
Intangible assets, net	11,474	13,295	37,274
Deferred income taxes	34,543	23,930	45,995
Other long term assets	78,836	72,876	72,293
Total assets	4,822,301	5,030,628	4,863,551
Current liabilities
Accounts payable	532,919	575,954	643,315
Accrued expenses	388,275	378,859	309,096
Customer refund liabilities	174,274	203,399	197,496
Operating lease liabilities	142,566	162,561	156,885
Other current liabilities	116,504	92,503	141,607
Total current liabilities	1,354,538	1,413,276	1,448,399
Long term debt, net of current maturities	662,903	1,003,556	997,347
Operating lease liabilities, non-current	728,077	839,414	872,791
Other long term liabilities	99,034	98,389	74,668
Total liabilities	2,844,552	3,354,635	3,393,205
Stockholders’ equity
Additional paid-in capital	1,096,856	1,061,173	1,050,983
Retained earnings	918,664	673,855	490,071
Accumulated other comprehensive loss	(37,929)	(59,185)	(70,858)
Total stockholders’ equity	1,977,749	1,675,993	1,470,346
Total liabilities and stockholders’ equity	4,822,301	5,030,628	4,863,551
Class A Common Stock
Stockholders’ equity
Common Stock	63	62	62
Class B Convertible Common Stock
Stockholders’ equity
Common Stock	11	11	11
Class C Common Stock
Stockholders’ equity
Common Stock	$ 84	$ 77	$ 77

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Unaudited Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares	Sep. 30, 2021	Dec. 31, 2020	Sep. 30, 2020
Class A Common Stock
Commons stock, par value (USD per share)	$ 0.0003	$ 0.0003	$ 0.0003
Common stock, authorized (in shares)	400,000,000	400,000,000	400,000,000
Common stock, shares issued (in shares)	188,645,131	188,603,686	188,533,987
Common stock, shares outstanding (in shares)	188,645,131	188,603,686	188,533,987
Class B Convertible Common Stock
Commons stock, par value (USD per share)	$ 0.0003	$ 0.0003	$ 0.0003
Common stock, authorized (in shares)	34,450,000	34,450,000	34,450,000
Common stock, shares issued (in shares)	34,450,000	34,450,000	34,450,000
Common stock, shares outstanding (in shares)	34,450,000	34,450,000	34,450,000
Class C Common Stock
Commons stock, par value (USD per share)	$ 0.0003	$ 0.0003	$ 0.0003
Common stock, authorized (in shares)	400,000,000	400,000,000	400,000,000
Common stock, shares issued (in shares)	252,992,053	231,953,667	231,684,883
Common stock, shares outstanding (in shares)	252,992,053	231,953,667	231,684,883

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Unaudited Condensed Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Income Statement [Abstract]
Net revenues	$ 1,545,532	$ 1,433,021	$ 4,154,261	$ 3,070,901
Cost of goods sold	757,428	746,701	2,068,695	1,604,428
Gross profit	788,104	686,320	2,085,566	1,466,473
Selling, general and administrative expenses	599,384	553,549	1,659,025	1,586,156
Restructuring and impairment charges	16,656	74,201	26,382	549,601
Income (loss) from operations	172,064	58,570	400,159	(669,284)
Interest income (expense), net	(9,261)	(14,955)	(36,705)	(32,251)
Other income (expense), net	(29,476)	(7,184)	(75,150)	(10,493)
Income (loss) before income taxes	133,327	36,431	288,304	(712,028)
Income tax expense (benefit)	18,962	(3,714)	38,870	14,696
Income (loss) from equity method investments	(921)	(1,199)	969	(6,906)
Net income (loss)	$ 113,444	$ 38,946	$ 250,403	$ (733,630)
Basic net income (loss) per share of Class A, B and C common stock (in dollars per share)	$ 0.24	$ 0.09	$ 0.54	$ (1.62)
Diluted net income (loss) per share of Class A, B and C common stock (in dollars per share)	$ 0.24	$ 0.09	$ 0.54	$ (1.62)
Weighted average common shares outstanding Class A, B and C common stock
Basic (in shares)	470,002	454,541	461,908	453,847
Diluted (in shares)	473,116	456,674	464,918	453,847

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Unaudited Condensed Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Statement of Comprehensive Income [Abstract]
Net income (loss)	$ 113,444	$ 38,946	$ 250,403	$ (733,630)
Other comprehensive income (loss):
Foreign currency translation adjustment	(7,499)	12,258	2,897	(28,785)
Unrealized gain (loss) on cash flow hedges, net of tax benefit (expense) of ($4,900) and $4,627 for the three months ended September 30, 2021 and 2020, respectively, and $(5,427) and $(3,850) for the nine months ended September 30, 2021 and 2020, respectively.	15,468	(18,498)	20,521	5,249
Gain (loss) on intra-entity foreign currency transactions	(2,295)	6,923	(2,162)	3,443
Total other comprehensive income (loss)	5,674	683	21,256	(20,093)
Comprehensive income (loss)	$ 119,118	$ 39,629	$ 271,659	$ (753,723)

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Unaudited Condensed Consolidated Statements of Comprehensive Income (Loss) (Parenthetical) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Statement of Comprehensive Income [Abstract]
Cash flow hedge, tax benefit (expense)	$ (4,900)	$ 4,627	$ (5,427)	$ (3,850)

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Unaudited Condensed Consolidated Statements of Stockholders' Equity - USD ($) shares in Thousands, $ in Thousands	Total	Class A Common Stock	Class C Common Stock	Common Stock Class A Common Stock	Common Stock Class B Convertible Common Stock	Common Stock Class C Common Stock	Additional Paid-in Capital	Retained Earnings	Accumulated Other Comprehensive Income (Loss)
Beginning balance (shares) at Dec. 31, 2019				188,290	34,450	229,028
Beginning balance at Dec. 31, 2019	$ 2,150,087			$ 62	$ 11	$ 76	$ 973,717	$ 1,226,986	$ (50,765)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Exercise of stock options (shares)				147		135
Exercise of stock options	517						517
Shares withheld in consideration of employee tax obligations relative to stock-based compensation arrangements (shares)				(1)		(233)
Shares withheld in consideration of employee tax obligations relative to stock-based compensation arrangements	(3,285)							(3,285)
Issuance of common stock, net of forfeitures (shares)				98		2,755
Issuance of common stock, net of forfeitures			$ 3,638			$ 1	3,637
Stock-based compensation expense	32,770						32,770
Equity Component value of convertible note issuance, net	40,342						40,342
Comprehensive income (loss)	(753,723)							(733,630)	(20,093)
Ending balance (shares) at Sep. 30, 2020				188,534	34,450	231,685
Ending balance at Sep. 30, 2020	1,470,346			$ 62	$ 11	$ 77	1,050,983	490,071	(70,858)
Beginning balance (shares) at Jun. 30, 2020				188,461	34,450	231,354
Beginning balance at Jun. 30, 2020	1,423,414			$ 62	$ 11	$ 77	1,044,055	450,750	(71,541)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Exercise of stock options (shares)				2		2
Exercise of stock options	18						18
Shares withheld in consideration of employee tax obligations relative to stock-based compensation arrangements (shares)						(57)
Shares withheld in consideration of employee tax obligations relative to stock-based compensation arrangements	375							375
Issuance of common stock, net of forfeitures (shares)				71		386
Issuance of common stock, net of forfeitures			978				978
Stock-based compensation expense	9,513						9,513
Equity Component value of convertible note issuance, net	(3,581)						(3,581)
Comprehensive income (loss)	39,629							38,946	683
Ending balance (shares) at Sep. 30, 2020				188,534	34,450	231,685
Ending balance at Sep. 30, 2020	1,470,346			$ 62	$ 11	$ 77	1,050,983	490,071	(70,858)
Beginning balance (shares) at Dec. 31, 2020				188,603	34,450	231,954
Beginning balance at Dec. 31, 2020	1,675,993			$ 62	$ 11	$ 77	1,061,173	673,855	(59,185)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Exercise of stock options (shares)				6		7
Exercise of stock options	24						23
Shares withheld in consideration of employee tax obligations relative to stock-based compensation arrangements (shares)						(291)
Shares withheld in consideration of employee tax obligations relative to stock-based compensation arrangements	(5,594)							(5,594)
Issuance of common stock, net of forfeitures (shares)				36		21,322
Issuance of common stock, net of forfeitures	2,715	$ 0				$ 7	2,708
Stock-based compensation expense	32,952						32,952
Comprehensive income (loss)	271,659							250,403	21,256
Ending balance (shares) at Sep. 30, 2021				188,645	34,450	252,992
Ending balance at Sep. 30, 2021	1,977,749			$ 63	$ 11	$ 84	1,096,856	918,664	(37,929)
Beginning balance (shares) at Jun. 30, 2021				188,625	34,450	245,144
Beginning balance at Jun. 30, 2021	1,846,710			$ 63	$ 11	$ 81	1,084,018	806,140	(43,603)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Shares withheld in consideration of employee tax obligations relative to stock-based compensation arrangements (shares)						(52)
Shares withheld in consideration of employee tax obligations relative to stock-based compensation arrangements	(920)							(920)
Issuance of common stock, net of forfeitures (shares)				20		7,900
Issuance of common stock, net of forfeitures		$ 0	$ 1,793			$ 3	1,790
Stock-based compensation expense	11,048						11,048
Comprehensive income (loss)	119,118							113,444	5,674
Ending balance (shares) at Sep. 30, 2021				188,645	34,450	252,992
Ending balance at Sep. 30, 2021	$ 1,977,749			$ 63	$ 11	$ 84	$ 1,096,856	$ 918,664	$ (37,929)

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Unaudited Consolidated Statements of Cash Flows - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020
Cash flows from operating activities
Net income (loss)	$ 250,403	$ (733,630)
Adjustments to reconcile net income (loss) to net cash used in operating activities
Depreciation and amortization	107,847	124,169
Unrealized foreign currency exchange rate gain (loss)	12,353	(3,676)
Loss on extinguishment of senior convertible notes	58,526	0
Loss on disposal of property and equipment	2,624	3,547
Non-cash restructuring and impairment charges	11,903	452,945
Amortization of bond premium	19,902	6,910
Stock-based compensation	32,953	32,770
Deferred income taxes	(23,414)	19,172
Changes in reserves and allowances	(19,215)	22,910
Changes in operating assets and liabilities:
Accounts receivable	(200,079)	(105,874)
Inventories	64,202	(159,930)
Prepaid expenses and other assets	(3,738)	64,404
Other non-current assets	52,179	(288,111)
Accounts payable	(36,913)	17,972
Accrued expenses and other liabilities	(123,273)	301,720
Customer refund liability	(29,072)	(23,164)
Income taxes payable and receivable	32,680	18,159
Net cash provided by (used in) operating activities	209,868	(249,707)
Cash flows from investing activities
Purchases of property and equipment	(57,660)	(71,639)
Sale of property and equipment	1,413	0
Purchase of businesses	0	(38,848)
Net cash used in investing activities	(56,247)	(110,487)
Cash flows from financing activities
Proceeds from long term debt and revolving credit facility	0	1,288,753
Payments on long term debt and revolving credit facility	(506,280)	(800,000)
Proceeds from capped call	91,722	0
Purchase of capped call	0	(47,850)
Employee taxes paid for shares withheld for income taxes	(5,623)	(3,285)
Proceeds from exercise of stock options and other stock issuances	2,739	3,855
Payments of debt financing costs	0	(5,150)
Net cash provided by (used in) financing activities	(417,442)	436,323
Effect of exchange rate changes on cash, cash equivalents and restricted cash	1,708	2,398
Net increase in (decrease in) cash, cash equivalents and restricted cash	(262,113)	78,527
Cash, cash equivalents and restricted cash
Beginning of period	1,528,515	796,008
End of period	1,266,402	874,535
Non-cash investing and financing activities
Change in accrual for property and equipment	$ (4,704)	$ (12,449)

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Description of Business and Basis of Presentation

9 Months Ended

Sep. 30, 2021

Organization, Consolidation and Presentation of Financial Statements [Abstract]

DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION

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 solve problems and make athletes better. The Company's products are made, sold, and worn worldwide.

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements 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. These unaudited condensed consolidated financial statements are presented in U.S. Dollars. 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. The unaudited condensed consolidated balance sheet as of September 30, 2021 is derived from the audited financial statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020 ("Fiscal 2020"), filed with the SEC on February 24, 2021 ("Annual Report on Form 10-K for Fiscal 2020"), which should be read in conjunction with these unaudited condensed consolidated financial statements. The unaudited results for the three and nine months ended September 30, 2021, are not necessarily indicative of the results to be expected for the fiscal year ending December 31, 2021 ("Fiscal 2021"), or any other portions thereof.

Connected Fitness

Prior to January 1, 2021, the Company's previously reported "Connected Fitness" segment was composed of digital subscription and advertising conducted through various platforms, predominantly the MyFitnessPal, MapMyFitness, consisting of applications such as MapMyRun and MapMyRide (collectively "MMR"), and Endomondo platforms. While the Company continues to operate the MMR platforms, MyFitnessPal was sold in December 2020 and Endomondo was wound down in December 2020 as part of the Company's 2020 restructuring plan. As a result of these changes, beginning in the first quarter of Fiscal 2021, the Company no longer reports Connected Fitness as a discrete reportable segment. The operating results of MMR are now included within the Company’s Corporate Other segment. Where applicable, all prior periods that used to separately reflect financial information about the Connected Fitness business have been recast to be included within the Corporate Other reportable segment, in order to conform with current period presentation. Such reclassifications did not affect total consolidated net revenues, consolidated income from operations or consolidated net income.

Management Estimates and COVID-19 Update

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.

Further, COVID-19 continues to significantly impact the global economy. As the impacts of the pandemic 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 pandemic impacts 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 COVID-19 and the actions that governments around the world may take to contain the virus or treat its impact. 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" in the Company's Annual Report on Form 10-K for Fiscal 2020.

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Summary of Significant Accounting Policies

9 Months Ended

Sep. 30, 2021

Accounting Policies [Abstract]

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Cash, Cash Equivalents and Restricted Cash

The Company considers all highly liquid investments with an original maturity of three months or less at the date of purchase to be cash and cash equivalents. The Company's restricted cash is reserved for payments related to claims for its captive insurance program, which is included in prepaid expenses and other current assets on the Company's unaudited condensed consolidated balance sheets.

The following table provides a reconciliation of cash, cash equivalents and restricted cash to the balances shown in the unaudited condensed consolidated statements of cash flows:

(In thousands)	September 30, 2021		December 31, 2020		September 30, 2020
Cash and cash equivalents	$	1,253,706	$	1,517,361	$	865,609
Restricted cash	12,696		11,154		8,926
Total cash, cash equivalents and restricted cash	$	1,266,402	$	1,528,515	$	874,535

Concentration of Credit Risk

Financial instruments that subject the Company to significant concentration of credit risk consist primarily of accounts receivable. The majority of the Company’s accounts receivable is due from large wholesale customers. One of the Company's customers accounted for more than 10.0% of the accounts receivable balance as of September 30, 2021. None of the Company's customers accounted for more than 10% of the accounts receivable balance as of December 31, 2020 and September 30, 2020, respectively. For the three and nine months ended September 30, 2021, one customer in North America accounted for more than 10% of the Company's net revenues. For the three and nine months ended September 30, 2020, no customer accounted for more than 10% of the Company's net revenues. The Company regularly evaluates the credit risk of the large wholesale customers which make up the majority of the Company's accounts receivable. Refer to the "Credit Losses - Allowance for Doubtful Accounts" below for a discussion of the evaluation of credit losses.

Credit Losses - Allowance for Doubtful Accounts

Credit losses are the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations. The Company is exposed to credit losses primarily through customer receivables associated with the sale of products within the Company's wholesale channels, recorded within accounts receivable, net on the Company's unaudited condensed consolidated balance sheet. The Company also has other receivables, including receivables from licensing arrangements recorded in prepaid expenses and other current assets on the Company's unaudited condensed consolidated balance sheet.

Credit is extended to customers based on a credit review. The credit review considers each customer’s financial condition, including a review of the customers established credit rating or, if an established customer rating is not available, then the Company's assessment of the customer’s creditworthiness is based on their financial statements, local industry practices, and business strategy. A credit limit and terms of credit are established for each customer based on the outcome of this review. The Company actively monitors ongoing credit exposure through review of customer balances against terms and payments against due dates. To mitigate credit risk, the Company may require customers to provide security in the form of guarantees, letters of credit, or prepayment. The Company is also exposed to credit losses through credit card receivables associated with the sale of products within the Company's direct-to-consumer channel.

The allowance for doubtful accounts is based on the Company’s assessment of the collectibility of customer accounts. The Company makes ongoing estimates relating to the collectibility of accounts receivable and records an allowance for estimated losses expected from the inability of its customers to make required payments. The Company establishes expected credit losses by evaluating historical levels of credit losses, current economic conditions that may affect a customer’s ability to pay, and creditworthiness of significant customers. These inputs are used to determine a range of expected credit losses and an allowance is recorded within the range. Accounts receivable are written off when there is no reasonable expectation of recovery.

The following table illustrates the activity in the Company's allowance for doubtful accounts:

(In thousands)	Balance as of December 31, 2020		Increases (decreases) to Costs and Expenses		Write-Offs Net of Recoveries		Balance as of September 30, 2021
Allowance for doubtful accounts - within accounts receivable, net	$	20,350	$	(4,149)	$	(2,100)	$	14,101
Allowance for doubtful accounts - within prepaid expenses and other current assets	$	7,029	$	—	$	—	$	7,029

The allowance for doubtful accounts was established with information available as of September 30, 2021, including reasonable and supportable estimates of future risk.

Revenue Recognition

The Company recognizes revenue pursuant to Accounting Standards Codification 606 ("ASC 606"). Net revenues consist of net sales of apparel, footwear and accessories, license revenues and revenues from digital subscriptions and advertising.

The Company recognizes revenue when it satisfies its performance obligations by transferring control of promised products or services to its customers, which occurs either at a point in time or over time, depending on when the customer obtains the ability to direct the use of and obtain substantially all of the remaining benefits from the products or services. The amount of revenue recognized considers terms of sale that create variability in the amount of consideration that the Company ultimately expects to be entitled to in exchange for the products or services and is subject to an overall constraint that a significant revenue reversal will not occur in future periods. Sales taxes imposed on the Company’s revenues from product sales are presented on a net basis on the unaudited condensed consolidated statements of operations, and therefore do not impact net revenues or costs of goods sold.

Revenue transactions associated with the sale of apparel, footwear, and accessories, comprise a single performance obligation, which consists of the sale of products to customers either through wholesale or direct-to-consumer channels. The Company satisfies the performance obligation and records revenues when transfer of control has passed to the customer, based on the terms of sale. In the Company’s wholesale channel, transfer of control is based upon shipment under free on board shipping point for most goods or upon receipt by the customer depending on the country of the sale and the agreement with the customer. The Company may also ship product directly from its supplier to wholesale customers and recognize revenue when the product is delivered to and accepted by the customer. In the Company’s direct-to-consumer channel, transfer of control takes place at the point of sale for brand and factory house customers and upon shipment to substantially all e-commerce customers. Payment terms for wholesale transactions are established in accordance with local and industry practices. Payment is generally required within 30 to 60 days of shipment to or receipt by the wholesale customer in the United States, and generally within 60 to 90 days of shipment to or receipt by the wholesale customer internationally. Payment is generally due at the time of sale for direct-to-consumer transactions.

Gift cards issued to customers by the Company are recorded as contract liabilities until they are redeemed, at which point revenue is recognized. The Company also estimates and recognizes revenue for gift card balances not expected to ever be redeemed ("breakage") to the extent that it does not have a legal obligation to remit the value of such unredeemed gift cards to the relevant jurisdiction as unclaimed or abandoned property. Such estimates are based upon historical redemption trends, with breakage income recognized in proportion to the pattern of actual customer redemptions.

Revenue from the Company's licensing arrangements is recognized over time during the period that licensees are provided access to the Company's trademarks and benefit from such access through their sales of licensed products. These arrangements require licensees to pay a sales-based royalty, which for most arrangements may be subject to a contractually guaranteed minimum royalty amount. Payments are generally due quarterly. The Company recognizes revenue for sales-based royalty arrangements (including those for which the royalty exceeds any contractually guaranteed minimum royalty amount) as licensed products are sold by the licensee. If a sales-based royalty is not ultimately expected to exceed a contractually guaranteed minimum royalty amount, the minimum is recognized as revenue over the contractual period, if all other criteria of revenue recognition have been met. This sales-based output measure of progress and pattern of recognition best represents the value transferred to the licensee over the term of the arrangement, as well as the amount of consideration that the Company is entitled to receive in exchange for providing access to its trademarks.

Revenue from digital subscriptions is recognized on a gross basis and is recognized over the term of the subscription. The Company receives payments in advance of revenue recognition for subscriptions and these

payments are recorded as contract liabilities in the Company's unaudited condensed consolidated balance sheet. Related commission cost is included in selling, general and administrative expense in the unaudited condensed consolidated statement of operations. Revenue from digital advertising is recognized as the Company satisfies performance obligations pursuant to customer insertion orders.

The Company records reductions to revenue for estimated customer returns, allowances, markdowns, and discounts. The Company bases its estimates on historical rates of customer returns and allowances as well as the specific identification of outstanding returns, markdowns and allowances that have not yet been received by the Company. The actual amount of customer returns and allowances, which is inherently uncertain, may differ from the Company’s estimates. If the Company determines that actual or expected returns or allowances are significantly higher or lower than the reserves it established, it would record a reduction or increase, as appropriate, to net sales in the period in which it makes such a determination. Provisions for customer specific discounts are based on negotiated arrangements with certain major customers. Reserves for returns, allowances, markdowns, and discounts are included within customer refund liability and the value of inventory associated with reserves for sales returns are included within prepaid expenses and other current assets on the unaudited condensed consolidated balance sheet. At a minimum, the Company reviews and refines these estimates on a quarterly basis.

The following table presents the customer refund liability, as well as the associated value of inventory for the periods indicated:

(In thousands)	Balance as of September 30, 2021		Balance as of December 31, 2020		Balance as of September 30, 2020
Customer refund liability	$	174,274	$	203,399	$	197,496
Inventory associated with the reserves	$	50,544	$	57,867	$	50,779

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, included in other current and other long-term liabilities, and gift cards, included in accrued expenses, on the Company's unaudited condensed consolidated balance sheets. As of September 30, 2021, December 31, 2020, and September 30, 2020, contract liabilities were $24.3 million, $26.7 million and $64.9 million, respectively.

For the three and nine months ended September 30, 2021, the Company recognized $3.1 million and $10.8 million, respectively, of revenue that was previously included in contract liabilities as of December 31, 2020. For the three and nine months ended September 30, 2020, the Company recognized $9.9 million and $21.2 million, respectively, of revenue that was previously included in contract liabilities as of December 31, 2019. 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. Commissions related to subscription revenue are capitalized and recognized over the subscription period.

Shipping and Handling Costs

The Company charges customers shipping and handling fees based on contractual terms, which are recorded in net revenues. The Company incurs freight costs associated with shipping goods to customers. These costs are recorded as a component of cost of goods sold.

The Company also incurs outbound handling costs associated with preparing goods to ship to customers and certain costs to operate the Company’s distribution facilities. These costs are recorded as a component of selling, general and administrative expenses. For the three and nine months ended September 30, 2021, these costs totaled $13.8 million and $63.3 million, respectively, (three and nine months ended September 30, 2020 - $21.2 million and $61.2 million, respectively).

Equity Method Investment

The Company has a common stock investment of 29.5% in Dome Corporation ("Dome"), the Company's Japanese licensee. The Company accounts for its investment in Dome under the equity method, given it has the ability to exercise significant influence, but not control, over Dome. The Company recorded its allocable share of Dome’s net income (loss) of $0 and $1.8 million for the three and nine months ended September 30, 2021, respectively, (three and nine months ended September 30, 2020 - $0 and $(1.4) million, respectively) within income

(loss) from equity method investment on the unaudited condensed consolidated statements of operations and as an adjustment to the invested balance within other long term assets on the unaudited condensed consolidated balance sheets. As of September 30, 2021, the carrying value of the Company's investment in Dome was $1.8 million. The Company's investment in Dome had no carrying value as of December 31, 2020 and September 30, 2020.

In addition to the investment in Dome, the Company has a license agreement with Dome. The Company recorded license revenues from Dome of $11.1 million and $22.9 million for the three and nine months ended September 30, 2021, respectively (three and nine months ended September 30, 2020 - $10.9 million and $17.4 million, respectively). As of September 30, 2021, December 31, 2020, and September 30, 2020, the Company had $8.9 million, $22.9 million, and $8.5 million, respectively, in licensing receivables outstanding, recorded in the prepaid expenses and other current assets line item within the Company's unaudited condensed consolidated balance sheets.

On March 2, 2020, as part of the Company's acquisition of Triple Pte. Ltd., the Company assumed 49.5% of common stock ownership in UA Sports (Thailand) Co., Ltd. (“UA Sports Thailand”). The Company accounts for its investment in UA Sports Thailand under the equity method, given it has the ability to exercise significant influence, but not control, over UA Sports Thailand. For the three and nine months ended September 30, 2021, the Company recorded the allocable share of UA Sports Thailand’s net income (loss) of $(921) thousand and $(873) thousand, respectively (three and nine months ended September 30, 2020 - $1.2 million and $1.8 million, respectively) within income (loss) from equity method investment on the unaudited condensed consolidated statements of operations and as an adjustment to the invested balance within other long term assets on the unaudited condensed consolidated balance sheets. As of September 30, 2021, December 31, 2020, and September 30, 2020, the carrying value of the Company’s investment in UA Sports Thailand was $4.7 million, $4.5 million and $3.7 million, respectively.

Recently Issued Accounting Standards

In August 2020, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2020-06 "Debt - Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity's Own Equity (Subtopic 815-40)" ("ASU 2020-06"). The amendment in this update simplifies the accounting for convertible instruments by reducing the number of accounting models available for convertible debt instruments and convertible preferred stock. This update also amends the guidance for the derivatives scope exception for contracts in an entity's own equity to reduce form-over-substance-based accounting conclusions and requires the application of the if-converted method for calculating diluted earnings per share. The update also requires entities to provide expanded disclosures about the terms and features of convertible instruments, how the instruments have been reported in the entity’s financial statements, and information about events, conditions, and circumstances that can affect how to assess the amount or timing of an entity’s future cash flows related to those instruments. The guidance is effective for interim and annual periods beginning after December 15, 2021. The Company currently does not expect this guidance to have a material impact on its unaudited condensed consolidated financial statements.

In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of Effects of Reference Rate Reform on Financial Reporting and then issued a subsequent amendment to the initial guidance under ASU 2021-01 (collectively Topic 848). Topic 848 provides practical expedients and exceptions for applying GAAP to contracts, hedging relationships, derivatives and other transactions affected by reference rate reform if certain criteria are met. The expedients and exceptions provided by the amendments in this update apply only to contracts, hedging relationships, derivatives and other transactions that reference the London interbank offered rate (“LIBOR”) or another reference rate expected to be discontinued as a result of reference rate reform. The Company adopted Topic 848 in the third quarter of Fiscal 2021. The adoption did not have an impact to the Company's unaudited condensed consolidated financial statements.

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Restructuring and Related Impairment Charges

9 Months Ended

Sep. 30, 2021

Restructuring and Related Activities [Abstract]

RESTRUCTURING AND RELATED IMPAIRMENT CHARGES

RESTRUCTURING AND RELATED IMPAIRMENT CHARGES

During Fiscal 2020, the Company's Board of Directors approved a restructuring plan ranging between $550 million to $600 million in costs (the "2020 restructuring plan") designed to rebalance the Company’s cost base to further improve profitability and cash flow generation.

Restructuring and related impairment charges and recoveries require the Company to make certain judgments and estimates regarding the amount and timing as to when these charges or recoveries occur. The estimated liability could change subsequent to its recognition, requiring adjustments to the expense and the liability recorded. On a quarterly basis, the Company conducts an evaluation of the related liabilities and expenses and revises its assumptions and estimates as appropriate, as new or updated information becomes available. As of September 30,

2021, the Company currently estimates total restructuring and related charges associated with the 2020 restructuring plan will range between $525 million to $575 million.

The restructuring and related charges primarily consist of approximately:

•$199 million of cash restructuring charges, of which approximately $28 million relates to employee severance and benefit costs, $14 million relates to facility and lease termination costs and $157 million relates to contract termination and other restructuring costs; and

•$376 million of non-cash charges, of which approximately $291 million relates to an impairment charge on the Company’s New York City flagship store and $85 million relates to intangibles and other asset related impairments.

The Company recorded $16.8 million and $26.9 million of restructuring and related impairment charges for the three and nine months ended September 30, 2021, respectively, and $70.2 million and $410.3 million for the three and nine months ended September 30, 2020, respectively, under the 2020 restructuring plan. As of September 30, 2021, $499.6 million of restructuring and related impairment charges under the 2020 restructuring plan have been recorded to date since the inception of the plan.

The following table illustrates the costs recorded during the three and nine months ended September 30, 2021, as well as the Company's current estimates of the amount expected to be incurred in connection with the 2020 restructuring plan:

	Restructuring and Impairment Charges Recorded								Estimated Restructuring and Impairment Charges (1)
(In thousands)	Three months ended September 30,				Nine months ended September 30,				Remaining to be Incurred		Total to be Incurred under plan
	2021		2020		2021		2020
Costs recorded in cost of goods sold:
Contract-based royalties	$	—	$	—	$	—	$	—	$	—	$	11,608
Inventory write-offs	107		—		515		—		1,000		2,283
Total costs recorded in cost of goods sold	107		—		515		—		1,000		13,891
Net costs (recoveries) recorded in restructuring and related impairment charges:
Property and equipment impairment	3,064		3,307		3,064		26,211		—		32,344
Intangible asset impairment	—		—		—		—		—		4,351
Right-of-use asset impairment	—		—		—		290,813		—		293,495
Employee related costs	(424)		26,410		(845)		27,239		—		27,734
Contract exit costs (2)	10,794		38,520		15,041		53,462		58,999		153,048
Other asset write off	1,055		—		2,400		—		7,349		22,823
Other restructuring costs	2,167		1,995		6,722		12,533		8,028		27,314
Total costs recorded in restructuring and impairment charges	16,656		70,232		26,382		410,258		74,376		561,109
Total restructuring and impairment charges	$	16,763	$	70,232	$	26,897	$	410,258	$	75,376	$	575,000

(1) Estimated restructuring and impairment charges reflect the high-end of the range of the estimated charges expected by the Company in connection with the 2020 restructuring plan.

(2) Contract exit costs primarily consist of proposed lease exits of certain brand and factory house stores and office facilities, and proposed marketing and other contract exits.

All restructuring and related impairment charges are included in the Company's Corporate Other segment.

For the three months ended September 30, 2021, approximately $10.5 million of the charges are North America related, $5.9 million are Latin America related and $1.4 million are Asia-Pacific related. These charges were offset by a recovery of $1.1 million related to EMEA.

For the three months ended September 30, 2020, approximately $39.1 million of the charges are North America related, $11.5 million are EMEA related, $6.1 million are Latin America related, and $3.6 million are Asia-Pacific related.

For the nine months ended September 30, 2021, approximately $16.7 million of the charges are North America related, $9.2 million are Latin America related and $2.1 million are Asia-Pacific related. These charges were offset by a recovery of $1.1 million related to EMEA.

For the nine months ended September 30, 2020, approximately $367.4 million of the charges are North America related, $11.6 million are EMEA related, $6.4 million are Latin America related and $3.6 million are Asia-Pacific related.

A summary of the activity in the restructuring reserve related to the Company's 2020 restructuring plan, as well as prior restructuring plans in 2018 and 2017 are as follows:

(In thousands)	Employee Related Costs		Contract Exit Costs		Other Restructuring Related Costs
Balance at January 1, 2021	$	12,868	$	61,642	$	6,098
Net additions (recoveries) charged to expense	(845)		17,814		(872)
Cash payments charged against reserve	(5,471)		(45,378)		(6,078)
Foreign exchange and other	(1,086)		(1,443)		140
Balance at September 30, 2021	$	5,466	$	32,635	$	(712)

During the three and nine months ended September 30, 2021, the Company also incurred net costs of $6.4 million and $10.3 million, respectively, associated with abandoned facilities and the write off of fixed assets under the 2020 restructuring plan.

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Leases

9 Months Ended

Sep. 30, 2021

Leases [Abstract]

LEASES

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 2035, excluding extensions at the Company's option, and include provisions for rental adjustments.

The Company accounts for a contract as a lease when it has the right to direct the use of the asset for a period of time while obtaining substantially all of the asset’s economic benefits. The Company determines the initial classification and measurement of its right-of-use ("ROU") assets and lease liabilities at the lease commencement date and thereafter if modified. ROU assets represent the Company’s right to control the underlying assets under lease, over the contractual term. ROU assets and lease liabilities are recognized on the unaudited condensed consolidated balance sheets based on the present value of future minimum lease payments to be made over the lease term. ROU assets and lease liabilities are established on the Company's unaudited condensed consolidated balance sheets for leases with an expected term greater than one year. Short-term lease payments were not material for the three and nine months ended September 30, 2021 and 2020.

As the rate implicit in a lease is not readily determinable, the Company uses its secured incremental borrowing rate to determine the present value of the lease payments. The Company calculates the incremental borrowing rate based on the current market yield curve and adjusts for foreign currency impacts for international leases.

Fixed lease costs are included in the recognition of ROU assets and lease liabilities. Variable lease costs are not included in the measurement of the lease liability. These variable lease payments are recognized in the unaudited condensed consolidated statements of operations in the period in which the obligation for those payments is incurred. Variable lease payments primarily consist of payments dependent on sales in brand and factory house stores. The Company has elected to combine lease and non-lease components in the determination of lease costs for its leases. The lease liability includes lease payments related to options to extend or renew the lease term only if the Company is reasonably certain to exercise those options.

As a result of the impacts of COVID-19, the Company sought concessions during Fiscal 2020 from landlords for certain leases of brand and factory house stores in the form of rent deferrals or rent waivers. Consistent with

updated guidance from the FASB in April 2020, the Company elected to account for treating these concessions as though the enforceable rights and obligations to the deferrals existed in the respective contracts at lease inception and will not account for the concessions as lease modifications, unless the concession results in a substantial change in the Company's obligations.

The Company's rent deferrals had no impact to rent expense during the three and nine months ended September 30, 2021 and 2020, and amounts deferred and payable in future periods have been included in short term lease liability on the Company's unaudited condensed consolidated balance sheet as of September 30, 2021. The Company's rent waivers, which were recorded as a reduction of rent expense, were approximately $2.2 million and $5.1 million for the three and nine months ended September 30, 2021, respectively, and $1.0 million and $3.4 million for the three and nine months ended September 30, 2020, respectively.

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 unaudited condensed consolidated statement of operations, for the periods indicated:

	Three months ended September 30,				Nine months ended September 30,
(In thousands)	2021		2020		2021		2020
Operating lease costs	$	35,630	$	36,882	$	106,973	$	108,614
Variable lease costs	$	4,650	$	2,879	$	12,025	$	5,447

There are no residual value guarantees that exist, and there are no restrictions or covenants imposed by leases. The Company rents or subleases 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:

	September 30, 2021		December 31, 2020		September 30, 2020
Weighted average remaining lease term (in years)	8.84		9.12		9.24
Weighted average discount rate	3.73	%	3.83	%	3.82	%

Supplemental Cash Flow Information

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

	Three months ended September 30,				Nine months ended September 30,
(In thousands)	2021		2020		2021		2020
Cash paid for amounts included in the measurement of lease liabilities
Operating cash outflows from operating leases	$	44,161	$	37,810	$	135,035	$	113,784
Leased assets obtained in exchange for new operating lease liabilities	$	5,348	$	11,018	$	18,396	$	393,850

Maturity of Lease Liabilities

The following table presents the future minimum lease payments under our operating lease liabilities as of September 30, 2021:

(In thousands)
Fiscal year ending December 31,
2021 (three months ended)	$	49,090
2022	164,404
2023	144,415
2024	124,609
2025	95,162
2026 and thereafter	453,252
Total lease payments	$	1,030,932
Less: Interest	160,289
Total present value of lease liabilities	$	870,643

As of September 30, 2021, the Company has additional operating lease obligations that have not yet commenced of approximately $12.2 million, which are not reflected in the table above.

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Credit Facility and Other Long Term Debt

9 Months Ended

Sep. 30, 2021

Debt Disclosure [Abstract]

CREDIT FACILITY AND OTHER LONG TERM DEBT

CREDIT FACILITY AND OTHER LONG TERM DEBT

The Company's outstanding debt consisted of the following:

(In thousands)	As of September 30, 2021		As of December 31, 2020		As of September 30, 2020
1.50% Convertible Senior Notes due 2024	$	80,919	$	500,000	$	500,000
3.25% Senior Notes due 2026	600,000		600,000		600,000
Credit Facility borrowings	—		—		—
Total principal payments due	680,919		1,100,000		1,100,000
Unamortized debt discount on Convertible Senior Notes	(10,105)		(79,031)		(84,127)
Unamortized debt discount on Senior Notes	(1,194)		(1,385)		(1,448)
Unamortized debt issuance costs - Convertible Senior Notes	(1,086)		(8,763)		(9,403)
Unamortized debt issuance costs - Senior Notes	(2,536)		(2,940)		(3,074)
Unamortized debt issuance costs - Credit facility	(3,095)		(4,325)		(4,601)
Total amount outstanding	662,903		1,003,556		997,347
Less:
Current portion of long-term debt:
Credit Facility borrowings	—		—		—
Non-current portion of long-term debt	$	662,903	$	1,003,556	$	997,347

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”). The credit agreement has a term of five years, maturing in March 2024, with permitted extensions under certain circumstances. In May 2020, the Company entered into an amendment to the credit agreement (the “first amendment”), pursuant to which the prior revolving credit commitments were reduced from $1.25 billion to $1.1 billion of borrowings. Subsequently, in May 2021, the Company entered into a second amendment to the credit agreement (the "second amendment" and, the credit agreement as amended by the first amendment and the second amendment, the "amended credit agreement" or the "revolving credit facility"). The second amendment provides for certain changes to the Company's covenants and decreases to certain applicable

rates effected by the first amendment. Where the first amendment previously provided for suspensions of and adjustments to the Company's existing interest coverage covenant and leverage covenant (each as defined below), and further required the Company to maintain a specific amount of minimum liquidity during certain quarters, the second amendment provided that these financial covenants became effective again as of March 31, 2021 and removed the minimum liquidity covenant. The second amendment also (i) decreases the interest rate margins that were previously provided for under the first amendment; (ii) reverses limitations effected by the first amendment on expansions of and extensions of the maturity of the revolving credit facility during the covenant suspension period; (iii) removes additional limitations on the availability of certain exceptions to the negative covenants, including the restricted payments covenant, that were imposed during the covenant suspension period; and (iv) provides mechanics relating to a transition away from LIBOR as a benchmark interest rate and the replacement of LIBOR by a replacement alternative benchmark rate or mechanism for loans made in U.S. Dollars and non-U.S. Dollar currencies.

As of September 30, 2021, December 31, 2020 and September 30, 2020 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, 2021, there was $4.4 million of letters of credit outstanding (December 31, 2020 and September 30, 2020 had $4.3 million and $15.5 million letters of credit outstanding, respectively).

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 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 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, 2021, 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.

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, (b) a rate based on the rates applicable for deposits in the interbank market for U.S. Dollars (“adjusted LIBOR”), (c) a rate based on the rates applicable for deposits in the interbank market for Japanese Yen ("adjusted TIBOR"), (d) a rate based on the rates applicable for deposits in the interbank market for Canadian Dollars ("adjusted CDOR"), or (e) a rate based on the rates applicable for deposits in the interbank market for Euro ("adjusted EURIBOR"), 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 1.25% to 1.75% for adjusted LIBOR, adjusted TIBOR, adjusted CDOR and adjusted EURIBOR loans and 0.25% to 0.75% for alternate base rate loans. 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.

The weighted average interest rate under the revolving credit facility borrowings was 2.1% and 2.3% during the three and nine months ended September 30, 2020, respectively. There were no borrowings outstanding during the nine months ended September 30, 2021. As of September 30, 2021, the commitment fee was 25.0 basis points.

1.50% Convertible Senior Notes

In May 2020, the Company issued $500.0 million aggregate principal amount of 1.50% convertible senior notes due 2024 (the “Convertible Senior Notes”). The Convertible Senior Notes bear interest at the 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 net proceeds from the offering (including the net proceeds from the exercise of the over-allotment option) was $488.8 million, after deducting the initial purchasers’ discount and estimated offering expenses paid by the Company, of which the Company used $47.9 million to pay the cost of the capped call transactions described below. The Company utilized $439.9 million to repay indebtedness that was outstanding under its revolving credit facility at the time, and to pay related fees and expenses.

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.

In May 2021, the Company entered into exchange agreements with certain holders of the Convertible Senior Notes (the "first exchanging holders"), who agreed to exchange $250.0 million in aggregate principal amount of the Convertible Senior Notes for cash and/or shares of the Company's Class C Common Stock, plus payment for accrued and unpaid interest (the "First Exchange"). In connection with the First Exchange, the Company paid approximately $300.0 million cash and issued approximately 11.1 million shares of the Company's Class C Common Stock to the first exchanging holders. In August 2021, the Company entered into additional exchange agreements with certain holders of the Convertible Senior Notes (the "second exchanging holders"), who agreed to exchange approximately $169.1 million in aggregate principal amount of the Convertible Senior Notes for cash and/or shares of the Company's Class C Common Stock, plus payment for accrued an unpaid interest (the "Second Exchange" and, together with the First Exchange, the "Exchanges"). In connection with the Second Exchange, the Company paid approximately $207.0 million cash and issued approximately 7.7 million shares of the Company's Class C Common Stock to the second exchanging holders. In connection with the Exchanges, the Company recognized a loss on debt extinguishment of approximately $23.8 million and $58.5 million for the three and nine months ended September 30, 2021, respectively, which has been recorded within Other Income (Expense), net on the Company's unaudited condensed consolidated statement of operations. Following the Exchanges, approximately $80.9 million aggregate principal amount of the Convertible Senior Notes remain outstanding.

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 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.

On or after 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.

In May 2021 and August 2021, concurrently with the Exchanges, the Company entered into, with each of the option counterparties, termination agreements relating to a number of options corresponding to the number of Convertible Senior Notes exchanged. Pursuant to such termination agreements, each of the option counterparties paid the Company a cash settlement amount in respect of the portion of capped call transactions being terminated. The Company received approximately $53.0 million and $38.6 million, in connection with such termination agreements related to the First Exchange and the Second Exchange, respectively.

The Convertible Senior Notes contain a cash conversion feature, and as a result, the Company has separated it into liability and equity components. The Company valued the liability component based on its borrowing rate for a similar debt instrument that does not contain a conversion feature. The equity component, which is recognized as a debt discount, was valued as the difference between the face value of the Convertible Senior Notes and the fair value of the liability component.

In connection with the Convertible Senior Notes issuance, the Company incurred deferred financing costs of $12.3 million, primarily related to fees paid to the initial purchasers of the offering, as well as legal and accounting fees. These costs were allocated on a pro rata basis, with $10.0 million allocated to the debt component and $2.2 million allocated to the equity component.

The debt discount and the debt portion of the deferred financing costs are being amortized to interest expense over the term of the Convertible Senior Notes using the effective interest rate method. The effective interest rate for the three months ended September 30, 2021 was 6.8%.

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”). Interest is 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 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.

Interest expense, net, was $9.3 million and $15.0 million for the three months ended September 30, 2021 and 2020, respectively, and $36.7 million and $32.3 million for the nine months ended September 30, 2021 and 2020, respectively.

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.

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Commitments and Contingencies

9 Months Ended

Sep. 30, 2021

Commitments and Contingencies Disclosure [Abstract]

COMMITMENTS AND CONTINGENCIES

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, and that the ultimate resolution of any such proceedings will not have a material adverse effect on its 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 August 4, 2017, the lead plaintiff in the Consolidated Securities Action, Aberdeen City Council as Administrating Authority for the North East Scotland Pension Fund (“Aberdeen”), joined by named plaintiff Bucks County Employees Retirement Fund (“Bucks County”), filed a consolidated amended complaint (the “Amended Complaint”) against the Company, the Company’s then-Chief Executive Officer, Kevin Plank, and former Chief Financial Officers Lawrence Molloy and Brad Dickerson. The Amended Complaint alleged violations of Section 10(b) (and Rule 10b-5) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and Section 20(a) control person liability under the Exchange Act against the officers named in the Amended Complaint, claiming that the defendants made material misstatements and omissions regarding, among other things, the Company's growth and consumer demand for certain of the Company's products. The class period identified in the Amended Complaint was September 16, 2015 through January 30, 2017. The Amended Complaint also asserted claims under Sections 11 and 15 of the Securities Act of 1933, as amended (the “Securities Act”), in connection with the Company’s public offering of senior unsecured notes in June 2016. The Securities Act claims were asserted against the Company, Mr. Plank, Mr. Molloy, the Company’s directors who signed the registration statement pursuant to which the offering was made and the underwriters that participated in the offering. The Amended Complaint alleged that the offering materials utilized in connection with the offering contained false and/or misleading statements and omissions regarding, among other things, the Company’s growth and consumer demand for certain of the Company’s products.

On November 9, 2017, the Company and the other defendants filed motions to dismiss the Amended Complaint. On September 19, 2018, the District Court dismissed the Securities Act claims with prejudice and the Exchange Act claims without prejudice. Lead plaintiff Aberdeen, joined by named plaintiff Monroe County Employees’ Retirement Fund (“Monroe”), filed a Second Amended Complaint on November 16, 2018, asserting claims under the Exchange Act and naming the Company and Mr. Plank as the remaining defendants. The remaining defendants filed a motion to dismiss the Second Amended Complaint on January 17, 2019. On August 19, 2019, the District Court dismissed the Second Amended Complaint with prejudice.

In September 2019, plaintiffs Aberdeen and Bucks County filed an appeal in the United States Court of Appeals for the Fourth Circuit challenging the decisions by the District Court on September 19, 2018 and August 19, 2019 (the “Appeal”). The Appeal was fully briefed as of January 16, 2020.

On November 6 and December 17, 2019, two purported shareholders of the Company filed putative securities class actions in the District Court against the Company and certain of its current and former executives (captioned Patel v. Under Armour, Inc., No. 1:19-cv-03209-RDB (“Patel”), and Waronker v. Under Armour, Inc., No. 1:19-cv-03581-RDB (“Waronker”), respectively). The complaints in Patel and Waronker alleged violations of Section 10(b) (and Rule 10b-5) of the Exchange Act, against all defendants, and Section 20(a) control person liability under the Exchange Act against the current and former officers named in the complaints. The complaints claimed that the defendants’ disclosures and statements supposedly misrepresented or omitted that the Company was purportedly shifting sales between quarterly periods allegedly to appear healthier and that the Company was under investigation

by and cooperating with the United States Department of Justice (“DOJ”) and the United States Securities and Exchange Commission (“SEC”) since July 2017.

On November 18, 2019, Aberdeen, the lead plaintiff in the Consolidated Securities Action, filed in the District Court a motion for an indicative ruling under Federal Rule of Civil Procedure 62.1 (the “Rule 62.1 Motion”) seeking relief from the final judgment pursuant to Federal Rule of Civil Procedure 60(b). The Rule 62.1 Motion alleged that purported newly discovered evidence entitled Aberdeen to relief from the District Court’s final judgment. Aberdeen also filed motions seeking (i) to consolidate the Patel and Waronker cases with the Consolidated Securities Action, and (ii) to be appointed lead plaintiff over the consolidated cases.

On January 22, 2020, the District Court granted Aberdeen’s Rule 62.1 motion and indicated that it would grant a motion for relief from the final judgment and provide Aberdeen with the opportunity to file a third amended complaint if the Fourth Circuit remanded for that purpose. The District Court further stated that it would, upon remand, consolidate the Patel and Waronker cases with the Consolidated Securities Action and appoint Aberdeen as the lead plaintiff over the consolidated cases.

On August 13, 2020, the Fourth Circuit remanded the Appeal to the District Court for the limited purpose of allowing the District Court to rule on Aberdeen’s motion seeking relief from the final judgment pursuant to Federal Rule of Civil Procedure 60(b). On September 14, 2020, the District Court issued an order granting that relief. The District Court’s order also consolidated the Patel and Waronker cases into the Consolidated Securities Action and appointed Aberdeen as lead plaintiff over the Consolidated Securities Action.

On October 14, 2020, Aberdeen, along with named plaintiffs Monroe and KBC Asset Management NV, filed a third amended complaint (the “TAC”) in the Consolidated Securities Action, asserting claims under Sections 10(b) and 20(a) of 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 DOJ and the SEC since July 2017. The class period identified in the TAC is September 16, 2015 through November 1, 2019.

On December 4, 2020, the Company and Mr. Plank filed a motion to dismiss the TAC for failure to state a claim. That motion was denied by the Court on May 18, 2021. Discovery in the Consolidated Securities Action commenced on June 4, 2021 and is currently ongoing. 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.

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

State Court Derivative Complaints

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 consolidated complaint in the Kenney matter 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 similar to those in the Amended Complaint in the Consolidated Securities Action matter discussed above, 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 purchase of certain parcels of land from entities controlled by Mr. Plank (through Sagamore). Sagamore purchased the parcels in 2014. Its total investment in the parcels was approximately $72.0 million, which included the initial $35.0 million purchase price for the property, an additional $30.6 million to terminate a lease encumbering the property and approximately $6.4 million of development costs. As previously disclosed, in June 2016, the Company purchased the

unencumbered parcels for $70.3 million in order to further expand the Company’s corporate headquarters to accommodate its growth needs. The Company negotiated a purchase price for the parcels that it determined represented the fair market value of the parcels and approximated the cost to the seller to purchase and develop the parcels. In connection with its evaluation of the potential purchase, the Company engaged an independent third-party to appraise the fair market value of the parcels, and the Audit Committee of the Company’s Board of Directors engaged its own independent appraisal firm to assess the parcels. The Audit Committee determined that the terms of the purchase were reasonable and fair, and the transaction was approved by the Audit Committee in accordance with the Company’s policy on transactions with related persons.

On March 29, 2019, the court in the consolidated 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 relating to the Company’s purchase of parcels in Port Covington (which derivative action has since been dismissed in its entirety). The court ordered stay in the consolidated Kenney action remains in effect at this time. In March 2021, the court in the consolidated Kenney action issued a notice of contemplated dismissal for lack of prosecution without prejudice pursuant to Maryland Rule 2-507. The court issued a second notice of contemplated dismissal for lack of prosecution without prejudice in August 2021.

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 informed both of these purported stockholders of that determination.

Between August 11, 2020 and October 21, 2020, three additional purported shareholder derivative complaints were filed in Maryland state court (in cases captioned Cordell v. Plank, et al. (filed August 11, 2020), Klein v. Plank, et al. (filed October 2, 2020), and Salo v. Plank, et al. (filed October 21, 2020), respectively).

The complaints in these cases name Mr. Plank, certain other current and former members of the Company’s Board of Directors, and certain current and former Company executives as defendants, and name the Company as a nominal defendant. The complaints in these actions assert 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 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; (iv) the Company’s supposed failure to timely disclose investigations by the SEC and DOJ; (v) the compensation paid to the Company’s directors and executives while the alleged wrongdoing was occurring; and/or (vi) stock sales by certain individual defendants. The complaints assert breach of fiduciary duty, unjust enrichment, and corporate waste claims against the individual defendants. These complaints seek damages on behalf of the Company and certain corporate governance related actions.

Prior to the filing of the derivative complaints in these three actions, none of the purported stockholders made a demand that the Company’s Board of Directors pursue the claims asserted in the complaints.

In March 2021, the court issued an order dismissing the Klein matter for lack of jurisdiction without prejudice pursuant to Maryland Rule 2-507. 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 State 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 State Derivative Action.

The Company believes that the claims asserted in the derivative complaints filed in Maryland state court are without merit and intends to defend these matters vigorously. However, because of the inherent uncertainty as to the outcome of these proceedings, the Company is unable at this time to estimate the possible impact of the outcome of these matters.

Federal Court Derivative Complaints

In July 2018, a stockholder derivative complaint was filed in the United States District Court for the District of Maryland, in a case captioned Andersen v. Plank, et al. The complaint in the Andersen matter names Mr. Plank, certain other current and former members of the Company’s Board of Directors and certain former Company executives as defendants, and names the Company as a nominal defendant. The complaint asserts breach of fiduciary duty and unjust enrichment claims against the individual defendants, and seeks damages on behalf of the Company and certain corporate governance related actions. The complaint includes allegations similar to those in the Amended Complaint in the Consolidated Securities Action matter discussed above, challenging, among other

things, the Company’s disclosures related to growth and consumer demand for certain of the Company’s products and stock sales by certain individual defendants.

The Andersen action was stayed from December 2018 to August 2019 and again from September 2019 to September 2020 (the “2019 Stay Order”). Pursuant to a series of court ordered stipulations, the terms of the 2019 Stay Order remained in effect through and including January 19, 2021. The stay expired on January 19, 2021.

Prior to the filing of the complaint in the Andersen action, the plaintiff had sent the Company’s Board of Directors a letter demanding that the Company pursue claims similar to the claims asserted in the complaint. 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 informed the plaintiff of that determination. During the pendency of the Andersen action, the plaintiff sent the Company’s Board of Directors a second letter demanding that the Company pursue claims similar to the claims asserted in the TAC in the Consolidated Securities Action. 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 informed the plaintiff of that determination.

In September 2020, two additional derivative complaints were filed in the United States District Court for the District of Maryland (in cases captioned Olin v. Plank, et al. (filed September 1, 2020), and Smith v. Plank, et al. (filed September 8, 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. On November 20, 2020, another derivative complaint was filed in the United States District Court for the District of Maryland, in a case captioned Viskovich v. Plank, et al. Prior to filing his derivative complaint, the plaintiff in the Viskovich matter made a demand that the Company’s Board of Directors pursue the claims asserted in the complaint but filed suit before the Board had responded to the demand. Following an investigation, a majority of disinterested and independent directors of the Company determined that the claims asserted in the demand by the plaintiff in the Viskovich action should not be pursued by the Company and informed the plaintiff of that determination.

The complaints in the Olin, Smith, and Viskovich cases name Mr. Plank, certain other current and former members of the Company’s Board of Directors, and certain current and former Company executives as defendants, and name the Company as a nominal defendant. The complaints in these actions assert 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 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; (iv) the Company’s supposed failure to timely disclose investigations by the SEC and DOJ; and/or (v) the compensation paid to the Company’s directors and executives while the alleged wrongdoing was occurring. The complaints assert breach of fiduciary duty, unjust enrichment, gross mismanagement, and/or corporate waste claims against the individual defendants. The Viskovich complaint also asserts a contribution claim against certain defendants under the federal securities laws. These complaints seek damages on behalf of the Company and certain corporate governance related actions.

On January 27, 2021, the court entered an order consolidating for all purposes the Andersen, Olin, Smith and Viskovich actions into a single action under the caption Andersen v. Plank, et al. (the “Federal Court Derivative Action”). In February 2021, counsel for the Smith and Olin plaintiffs, on the one hand, and counsel for the Andersen and Viskovich plaintiffs, on the other hand, filed motions seeking to be appointed as lead counsel in the Federal Court Derivative Action. These motions are currently pending.

The Company believes that the claims asserted in the Federal Court 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.

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Fair Value Measurements

9 Months Ended

Sep. 30, 2021

Fair Value Disclosures [Abstract]

FAIR VALUE MEASUREMENTS

FAIR VALUE MEASUREMENTSFair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (an exit price). 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.

Our 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, 2021						December 31, 2020						September 30, 2020
(In thousands)	Level 1		Level 2		Level 3		Level 1		Level 2		Level 3		Level 1		Level 2		Level 3
Derivative foreign currency contracts (see Note 8)	$	—	$	3,197	$	—	$	—	$	(22,122)	$	—	$	—	$	(203)	$	—
TOLI policies held by the Rabbi Trust	$	—	$	8,525	$	—	$	—	$	7,697	$	—	$	—	$	7,229	$	—
Deferred Compensation Plan obligations	$	—	$	(15,122)	$	—	$	—	$	(14,314)	$	—	$	—	$	(13,113)	$	—

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 trust owned life insurance (“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 Under Armour, Inc. Deferred Compensation Plan (the “Deferred Compensation Plan”), which represent the underlying liabilities to participants in the Deferred Compensation Plan. Liabilities under the Deferred Compensation Plan are recorded at amounts due to participants, based on the fair value of participants’ selected investments.

As of September 30, 2021, December 31, 2020, and September 30, 2020, the fair value of the Convertible Senior Notes was $150.2 million, $828.2 million, and $624.8 million, respectively. The Company entered into exchange agreements with certain holders during the three and nine months ended September 30, 2021 to exchange approximately $169.0 million and $419.0 million, respectively, in aggregate principal amount of the Convertible Senior Notes for a combination of cash and shares (see Note 5 to the unaudited condensed consolidated financial statements).

As of September 30, 2021, December 31, 2020, and September 30, 2020, the fair value of the Senior Notes was $622.5 million, $602.6 million, and $566.6 million, respectively.

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).

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.

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Risk Management and Derivatives

9 Months Ended

Sep. 30, 2021

Derivative Instruments and Hedging Activities Disclosure [Abstract]

RISK MANAGEMENT AND DERIVATIVES

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, 2021, 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;

•U.S. Dollar/Japanese Yen; and

•U.S. Dollar/Korean Won currency pairs.

All derivatives are recognized on the unaudited 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 unaudited condensed consolidated balance sheets. Refer to Note 7 of the unaudited condensed consolidated financial statements for a discussion of the fair value measurements:

(In thousands)	Balance Sheet Classification	September 30, 2021		December 31, 2020		September 30, 2020
Derivatives designated as hedging instruments under ASC 815
Foreign currency contracts	Other current assets	$	6,424	$	—	$	5,659
Foreign currency contracts	Other long term assets	4,377		—		—
Total derivative assets designated as hedging instruments		$	10,801	$	—	$	5,659
Foreign currency contracts	Other current liabilities	$	7,123	$	17,601	$	4,942
Foreign currency contracts	Other long term liabilities	620		6,469		—
Total derivative liabilities designated as hedging instruments		$	7,743	$	24,070	$	4,942
Derivatives not designated as hedging instruments under ASC 815
Foreign currency contracts	Other current assets	$	4,935	$	2,384	$	5,373
Total derivative assets not designated as hedging instruments		$	4,935	$	2,384	$	5,373
Foreign currency contracts	Other current liabilities	$	2,242	$	6,464	$	1,714
Total derivative liabilities not designated as hedging instruments		$	2,242	$	6,464	$	1,714

The following table presents the amounts in the unaudited condensed consolidated statements of operations in which the effects of cash flow hedges are recorded and the effects of cash flow hedge activity on these line items:

	Three months ended September 30,								Nine months ended September 30,
	2021				2020				2021				2020
(In thousands)	Total		Amount of Gain (Loss) on Cash Flow Hedge Activity		Total		Amount of Gain (Loss) on Cash Flow Hedge Activity		Total		Amount of Gain (Loss) on Cash Flow Hedge Activity		Total	Amount of Gain (Loss) on Cash Flow Hedge Activity
Net revenues	$	1,545,532	$	(1,953)	$	1,433,021	$	218	$	4,154,261	$	(7,477)	$3,070,901	$	3,495
Cost of goods sold	$	757,428	$	(3,947)	$	746,701	$	4,496	2,068,695		(8,586)		1,604,428	7,179
Interest income (expense), net	$	(9,261)	$	(9)	$	(14,955)	$	(9)	(36,705)		(27)		(32,251)	(27)
Other income (expense), net	$	(29,476)	$	—	$	(7,184)	$	4	(75,150)		—		(10,493)	25

The following tables present the amounts affecting the unaudited statements of comprehensive income (loss):

(In thousands)	Balance as of June 30, 2021		Amount of gain (loss) recognized in other comprehensive income (loss) on derivatives		Amount of gain (loss) reclassified from other comprehensive income (loss) into income		Balance as of September 30, 2021
Derivatives designated as cash flow hedges
Foreign currency contracts	$	(20,346)	$	14,459	$	(5,900)	$	13
Interest rate swaps	(522)		—		(9)		(513)
Total designated as cash flow hedges	$	(20,868)	$	14,459	$	(5,909)	$	(500)

(In thousands)	Balance as of December 31, 2020		Amount of gain (loss) recognized in other comprehensive income (loss) on derivatives		Amount of gain (loss) reclassified from other comprehensive income (loss) into income		Balance as of September 30, 2021
Derivatives designated as cash flow hedges
Foreign currency contracts	$	(25,908)	$	9,858	$	(16,063)	$	13
Interest rate swaps	(541)		—		(28)		$	(513)
Total designated as cash flow hedges	$	(26,449)	$	9,858	$	(16,091)	$	(500)

(In thousands)	Balance as of June 30, 2020		Amount of gain (loss) recognized in other comprehensive income (loss) on derivatives		Amount of gain (loss) reclassified from other comprehensive income (loss) into income		Balance as of September 30, 2020
Derivatives designated as cash flow hedges
Foreign currency contracts	$	26,200	$	(18,432)	$	4,701	$	3,066
Interest rate swaps	(559)		—		(9)		(550)
Total designated as cash flow hedges	$	25,641	$	(18,432)	$	4,692	$	2,516

(In thousands)	Balance as of December 31, 2019		Amount of gain (loss) recognized in other comprehensive income (loss) on derivatives		Amount of gain (loss) reclassified from other comprehensive income (loss) into income		Balance as of September 30, 2020
Derivatives designated as cash flow hedges
Foreign currency contracts	$	(6,005)	$	19,727	$	10,655	$	3,066
Interest rate swaps	(577)		—		(27)		(550)
Total designated as cash flow hedges	$	(6,582)	$	19,727	$	10,628	$	2,516

The following table presents the amounts in the unaudited condensed consolidated statements of operations in which the effects of undesignated derivative instruments are recorded and the effects of fair value hedge activity on these line items:

	Three months ended September 30,								Nine months ended September 30,
	2021				2020				2021				2020
(In thousands)	Total		Amount of Gain (Loss) on Fair Value Hedge Activity		Total		Amount of Gain (Loss) on Fair Value Hedge Activity		Total		Amount of Gain (Loss) on Fair Value Hedge Activity		Total		Amount of Gain (Loss) on Fair Value Hedge Activity
Other income (expense), net	$	(29,476)	$	(2,382)	$	(7,184)	$	(962)	$	(75,150)	$	(3,197)	$	(10,493)	$	1,022

Cash Flow Hedges

The Company is exposed to gains and losses resulting from fluctuations in foreign currency exchange rates relating to transactions generated by its international subsidiaries in currencies other than their local currencies. These gains and losses are driven by non-functional currency generated revenue, non-functional currency inventory purchases, investments in U.S. Dollar denominated available-for-sale debt securities, and certain other intercompany transactions. The Company enters into foreign currency contracts to reduce the risk associated with the foreign currency exchange rate fluctuations on these transactions. Certain contracts are designated as cash flow hedges. As of September 30, 2021, December 31, 2020, and September 30, 2020, the aggregate notional value of the Company's outstanding cash flow hedges was $739.1 million, $812.5 million, and $301.2 million, respectively, with contract maturities ranging from one to twenty-four months.

The Company may enter into long term debt arrangements with various lenders which bear a range of fixed and variable rates of interest. The nature and amount of the Company's long term debt can be expected to vary as a result of future business requirements, market conditions and other factors. The Company may elect to enter into interest rate swap contracts to reduce the impact associated with interest rate fluctuations. The interest rate swap contracts are accounted for as cash flow hedges. Refer to Note 5 of the unaudited condensed consolidated financial statements for a discussion of long term debt. As of September 30, 2021, December 31, 2020, and September 30, 2020, the Company had no outstanding interest rate swap contracts.

For contracts designated as cash flow hedges, the changes in fair value are reported as other comprehensive income (loss) and are recognized in current earnings in the period or periods during which the hedged transaction affects current earnings. Effective hedge results are classified in the unaudited condensed consolidated statements of operations in the same manner as the underlying exposure.

Undesignated Derivative Instruments

The Company may elect to enter into foreign exchange forward contracts to mitigate the change in fair value of specific assets and liabilities on the unaudited condensed consolidated balance sheets. These undesignated instruments are recorded at fair value as a derivative asset or liability on the unaudited condensed consolidated balance sheets with their corresponding change in fair value recognized in other expense, net, together with the re-measurement gain or loss from the hedged balance sheet position. As of September 30, 2021, December 31, 2020, and September 30, 2020, the total notional value of the Company's outstanding undesignated derivative instruments was $431.1 million, $313.1 million, and $262.9 million, respectively.

Credit Risk

The Company enters into derivative contracts with major financial institutions with investment grade credit ratings and is exposed to credit losses in the event of non-performance by these financial institutions. This credit risk is generally limited to the unrealized gains in the derivative contracts. However, the Company monitors the credit quality of these financial institutions and considers the risk of counterparty default to be minimal.

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Provision for Income Taxes

9 Months Ended

Sep. 30, 2021

Income Tax Disclosure [Abstract]

PROVISION FOR INCOME TAXES

PROVISION FOR INCOME TAXES

Provision for Income Taxes

The Company computes its quarterly income tax provision under the effective tax rate method by applying an estimated anticipated annual effective rate to the year-to-date earnings. Losses from jurisdictions for which no benefit can be recognized are excluded from the overall computations of the estimated annual effective tax rate and a separate estimated annual effective tax rate is computed and applied to ordinary income or loss in the loss jurisdiction. Income taxes for any significant and unusual or extraordinary transactions are computed and recorded in the period in which the specific transaction occurs. For the comparable three and nine months ended September 30, 2021 and 2020 respectively, all global jurisdictions were included in the estimated annual effective tax rate.

The effective rates for income taxes were 14.2% and (10.2)% for the three months ended September 30, 2021 and 2020, respectively. The change in the Company’s effective tax rate was primarily driven by the proportion of earnings subject to tax in the United States as compared to foreign jurisdictions in each period, the recording of valuation allowance releases against current 2021 earnings forecasted in the United States, and discrete items during the three months ended September 30, 2020.

Valuation Allowance

The Company evaluates on a quarterly basis whether the deferred tax assets are realizable which requires significant judgment. The Company considers all available positive and negative evidence, including historical operating performance and expectations of future operating performance. To the extent the Company believes it is more likely than not that all or some portion of the asset will not be realized, valuation allowances are established against the Company's deferred tax assets, which increase income tax expense in the period when such a determination is made.

As noted in the Company's Annual Report on Form 10-K for Fiscal 2020, a significant portion of the Company’s deferred tax assets relate to United States federal and state taxing jurisdictions. Realization of these deferred tax assets is dependent on future United States pre-tax earnings. As of September 30, 2021 the Company continues to believe that the weight of the negative evidence outweighs the positive evidence regarding the realization of the Company’s United States federal and the majority of the United States state deferred tax assets. Accordingly, the Company continues to maintain valuation allowances on these deferred tax assets. Furthermore, consistent with prior periods, valuation allowances have also been recorded against select foreign deferred tax assets in jurisdictions where the weight of negative evidence outweighs the positive evidence regarding the realization of deferred tax assets.

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Earnings per Share

9 Months Ended

Sep. 30, 2021

Earnings Per Share [Abstract]

EARNINGS PER SHARE

EARNINGS PER SHARE

The following represents a reconciliation from basic income (loss) per share to diluted income (loss) per share:

	Three Months Ended September 30,				Nine Months Ended September 30,
(In thousands, except per share amounts)	2021		2020		2021		2020
Numerator
Net income (loss)	$	113,444	$	38,946	$	250,403	$	(733,630)
Denominator
Weighted average common shares outstanding Class A, B and C	470,002		454,541		461,908		453,847
Effect of dilutive securities Class A, B, and C	3,114		2,133		3,010		—
Weighted average common shares and dilutive securities outstanding Class A, B, and C	473,116		456,674		464,918		453,847
Basic net income (loss) per share of Class A, B and C common stock	$	0.24	$	0.09	$	0.54	$	(1.62)
Diluted net income (loss) per share of Class A, B and C common stock	$	0.24	$	0.09	$	0.54	$	(1.62)

Effects of potentially dilutive securities are presented only in periods in which they are dilutive. Stock options and restricted stock units representing 0.5 million and 1.9 million shares of Class A and Class C Common Stock outstanding for the three and nine months ended September 30, 2021, respectively, (three and nine months ended September 30, 2020 - 7.3 million and 0 respectively), were excluded from the computation of diluted earnings per share because their effect would have been anti-dilutive. Due to the Company being in a net loss position for the nine months ended September 30, 2020, there were no stock options or restricted stock units included in the computation of diluted earnings per share, as their effect would have been anti-dilutive.

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Segment Data and Disaggregated Revenue

9 Months Ended

Sep. 30, 2021

Segment Reporting [Abstract]

SEGMENT DATA AND DISAGGREGATED REVENUE

SEGMENT DATA AND DISAGGREGATED REVENUE

The Company’s operating segments are based on how the Chief Operating Decision Maker (“CODM”) makes decisions about allocating resources and assessing performance. As such, the CODM receives discrete financial information for the Company's principal business by geographic region based on the Company’s strategy of being a global brand. These geographic regions include North America, Europe, the Middle East and Africa (“EMEA”), Asia-Pacific, and Latin America. Each geographic segment operates exclusively in one industry: the development, marketing and distribution of branded performance apparel, footwear and accessories. Total expenditures for additions to long-lived assets are not disclosed as this information is not regularly provided to the CODM.

Prior to the sale of MyFitnessPal in December 2020, the CODM also received discrete financial information for the Connected Fitness Segment. However, beginning January 1, 2021, the Company no longer reports Connected Fitness as a discrete reportable operating segment (see Note 1 to the unaudited condensed consolidated financial

statements). All prior period balances have been recast to conform to current period presentation. Such reclassifications did not affect total consolidated revenues, consolidated income from operations or consolidated net income.

The Company excludes certain corporate costs from its segment profitability measures. The Company reports these costs within Corporate Other, along with the revenue and costs related to the Company's MMR platforms, which is designed to provide increased transparency and comparability of the Company's operating segments' performance. Furthermore, the majority of the costs included within Corporate Other consists largely of general and administrative expenses not allocated to an operating segment, including expenses associated with centrally managed departments such as global marketing, global IT, global supply chain, innovation, and other corporate support functions; costs related to the Company's global assets and global marketing; costs related to the Company’s headquarters such as restructuring and restructuring related charges; and certain foreign currency hedge gains and losses.

The following tables summarize the Company's net revenues and operating income (loss) by its geographic segments. Intercompany balances were eliminated for separate disclosure:

	Three Months Ended September 30,				Nine Months Ended September 30,
(In thousands)	2021		2020		2021		2020
Net revenues
North America	$	1,035,862	$	962,565	$	2,747,082	$	2,021,247
EMEA	241,201		210,111		642,308		437,140
Asia-Pacific	211,950		178,895		614,539		397,846
Latin America	56,380		44,338		151,203		108,573
Corporate Other (1)	139		37,112		(871)		106,095
Total net revenues	$	1,545,532	$	1,433,021	$	4,154,261	$	3,070,901

	Three Months Ended September 30,				Nine Months Ended September 30,
(In thousands)	2021		2020		2021		2020
Operating income (loss)
North America	$	292,367	$	224,593	$	728,698	$	251,579
EMEA	41,772		40,834		108,350		43,840
Asia-Pacific	40,529		19,248		111,088		(30,040)
Latin America	10,831		1,802		18,289		(50,756)
Corporate Other (1)	(213,435)		(227,907)		(566,266)		(883,907)
Total operating income (loss)	172,064		58,570		400,159		(669,284)
Interest expense, net	(9,261)		(14,955)		(36,705)		(32,251)
Other income (expense), net	(29,476)		(7,184)		(75,150)		(10,493)
Income (loss) before income taxes	$	133,327	$	36,431	$	288,304	$	(712,028)

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

	Three Months Ended September 30,				Nine Months Ended September 30,
(In thousands)	2021		2020		2021		2020
Apparel	$	1,058,231	$	927,041	$	2,742,465	$	1,951,186
Footwear	329,718		298,687		981,406		693,464
Accessories	126,345		145,060		355,244		268,912
Net Sales	1,514,294		1,370,788		4,079,115		2,913,562
License revenues	31,099		25,121		76,017		51,244
Corporate Other (1)	139		37,112		(871)		106,095
Total net revenues	$	1,545,532	$	1,433,021	$	4,154,261	$	3,070,901

	Three Months Ended September 30,				Nine Months Ended September 30,
(In thousands)	2021		2020		2021		2020
Wholesale	$	910,655	$	830,478	$	2,477,853	$	1,721,432
Direct-to-consumer	603,639		540,310		1,601,262		1,192,130
Net Sales	1,514,294		1,370,788		4,079,115		2,913,562
License revenues	31,099		25,121		76,017		51,244
Corporate Other (1)	139		37,112		(871)		106,095
Total net revenues	$	1,545,532	$	1,433,021	$	4,154,261	$	3,070,901

(1) Prior to Fiscal 2021, the Company's Connected Fitness segment was separately disclosed, however, effective January 1, 2021, Corporate Other now includes the remaining Connected Fitness business consisting of MMR for Fiscal 2021 and the entire Connected Fitness business for Fiscal 2020. All prior periods were recast to conform to the current period presentation. Such reclassifications did not affect total consolidated net revenues, consolidated income from operations or consolidated net income (see Note 1 to the unaudited condensed consolidated financial statements).

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Summary of Significant Accounting Policies (Policies)

9 Months Ended

Sep. 30, 2021

Accounting Policies [Abstract]

Basis of Presentation

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements 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. These unaudited condensed consolidated financial statements are presented in U.S. Dollars. 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. The unaudited condensed consolidated balance sheet as of September 30, 2021 is derived from the audited financial statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020 ("Fiscal 2020"), filed with the SEC on February 24, 2021 ("Annual Report on Form 10-K for Fiscal 2020"), which should be read in conjunction with these unaudited condensed consolidated financial statements. The unaudited results for the three and nine months ended September 30, 2021, are not necessarily indicative of the results to be expected for the fiscal year ending December 31, 2021 ("Fiscal 2021"), or any other portions thereof.

Connected Fitness

Prior to January 1, 2021, the Company's previously reported "Connected Fitness" segment was composed of digital subscription and advertising conducted through various platforms, predominantly the MyFitnessPal, MapMyFitness, consisting of applications such as MapMyRun and MapMyRide (collectively "MMR"), and Endomondo platforms. While the Company continues to operate the MMR platforms, MyFitnessPal was sold in December 2020 and Endomondo was wound down in December 2020 as part of the Company's 2020 restructuring plan. As a result of these changes, beginning in the first quarter of Fiscal 2021, the Company no longer reports Connected Fitness as a discrete reportable segment. The operating results of MMR are now included within the Company’s Corporate Other segment. Where applicable, all prior periods that used to separately reflect financial information about the Connected Fitness business have been recast to be included within the Corporate Other reportable segment, in order to conform with current period presentation. Such reclassifications did not affect total consolidated net revenues, consolidated income from operations or consolidated net income.

Management Estimates and COVID-19 Update

Management Estimates and COVID-19 Update

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.

Further, COVID-19 continues to significantly impact the global economy. As the impacts of the pandemic 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 pandemic impacts 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 COVID-19 and the actions that governments around the world may take to contain the virus or treat its impact. 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" in the Company's Annual Report on Form 10-K for Fiscal 2020.

Cash, Cash Equivalents and Restricted Cash

Cash, Cash Equivalents and Restricted CashThe Company considers all highly liquid investments with an original maturity of three months or less at the date of purchase to be cash and cash equivalents. The Company's restricted cash is reserved for payments related to claims for its captive insurance program, which is included in prepaid expenses and other current assets on the Company's unaudited condensed consolidated balance sheets.

Concentration of Credit Risk

Concentration of Credit Risk

Financial instruments that subject the Company to significant concentration of credit risk consist primarily of accounts receivable. The majority of the Company’s accounts receivable is due from large wholesale customers. One of the Company's customers accounted for more than 10.0% of the accounts receivable balance as of September 30, 2021. None of the Company's customers accounted for more than 10% of the accounts receivable balance as of December 31, 2020 and September 30, 2020, respectively. For the three and nine months ended September 30, 2021, one customer in North America accounted for more than 10% of the Company's net revenues. For the three and nine months ended September 30, 2020, no customer accounted for more than 10% of the Company's net revenues. The Company regularly evaluates the credit risk of the large wholesale customers which make up the majority of the Company's accounts receivable. Refer to the "Credit Losses - Allowance for Doubtful Accounts" below for a discussion of the evaluation of credit losses.

Credit Losses - Allowance for Doubtful Accounts

Credit Losses - Allowance for Doubtful Accounts

Credit losses are the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations. The Company is exposed to credit losses primarily through customer receivables associated with the sale of products within the Company's wholesale channels, recorded within accounts receivable, net on the Company's unaudited condensed consolidated balance sheet. The Company also has other receivables, including receivables from licensing arrangements recorded in prepaid expenses and other current assets on the Company's unaudited condensed consolidated balance sheet.

Credit is extended to customers based on a credit review. The credit review considers each customer’s financial condition, including a review of the customers established credit rating or, if an established customer rating is not available, then the Company's assessment of the customer’s creditworthiness is based on their financial statements, local industry practices, and business strategy. A credit limit and terms of credit are established for each customer based on the outcome of this review. The Company actively monitors ongoing credit exposure through review of customer balances against terms and payments against due dates. To mitigate credit risk, the Company may require customers to provide security in the form of guarantees, letters of credit, or prepayment. The Company is also exposed to credit losses through credit card receivables associated with the sale of products within the Company's direct-to-consumer channel.

The allowance for doubtful accounts is based on the Company’s assessment of the collectibility of customer accounts. The Company makes ongoing estimates relating to the collectibility of accounts receivable and records an allowance for estimated losses expected from the inability of its customers to make required payments. The Company establishes expected credit losses by evaluating historical levels of credit losses, current economic conditions that may affect a customer’s ability to pay, and creditworthiness of significant customers. These inputs are used to determine a range of expected credit losses and an allowance is recorded within the range. Accounts receivable are written off when there is no reasonable expectation of recovery.

The allowance for doubtful accounts was established with information available as of September 30, 2021, including reasonable and supportable estimates of future risk.

Revenue Recognition

Revenue Recognition

The Company recognizes revenue pursuant to Accounting Standards Codification 606 ("ASC 606"). Net revenues consist of net sales of apparel, footwear and accessories, license revenues and revenues from digital subscriptions and advertising.

The Company recognizes revenue when it satisfies its performance obligations by transferring control of promised products or services to its customers, which occurs either at a point in time or over time, depending on when the customer obtains the ability to direct the use of and obtain substantially all of the remaining benefits from the products or services. The amount of revenue recognized considers terms of sale that create variability in the amount of consideration that the Company ultimately expects to be entitled to in exchange for the products or services and is subject to an overall constraint that a significant revenue reversal will not occur in future periods. Sales taxes imposed on the Company’s revenues from product sales are presented on a net basis on the unaudited condensed consolidated statements of operations, and therefore do not impact net revenues or costs of goods sold.

Revenue transactions associated with the sale of apparel, footwear, and accessories, comprise a single performance obligation, which consists of the sale of products to customers either through wholesale or direct-to-consumer channels. The Company satisfies the performance obligation and records revenues when transfer of control has passed to the customer, based on the terms of sale. In the Company’s wholesale channel, transfer of control is based upon shipment under free on board shipping point for most goods or upon receipt by the customer depending on the country of the sale and the agreement with the customer. The Company may also ship product directly from its supplier to wholesale customers and recognize revenue when the product is delivered to and accepted by the customer. In the Company’s direct-to-consumer channel, transfer of control takes place at the point of sale for brand and factory house customers and upon shipment to substantially all e-commerce customers. Payment terms for wholesale transactions are established in accordance with local and industry practices. Payment is generally required within 30 to 60 days of shipment to or receipt by the wholesale customer in the United States, and generally within 60 to 90 days of shipment to or receipt by the wholesale customer internationally. Payment is generally due at the time of sale for direct-to-consumer transactions.

Gift cards issued to customers by the Company are recorded as contract liabilities until they are redeemed, at which point revenue is recognized. The Company also estimates and recognizes revenue for gift card balances not expected to ever be redeemed ("breakage") to the extent that it does not have a legal obligation to remit the value of such unredeemed gift cards to the relevant jurisdiction as unclaimed or abandoned property. Such estimates are based upon historical redemption trends, with breakage income recognized in proportion to the pattern of actual customer redemptions.

Revenue from the Company's licensing arrangements is recognized over time during the period that licensees are provided access to the Company's trademarks and benefit from such access through their sales of licensed products. These arrangements require licensees to pay a sales-based royalty, which for most arrangements may be subject to a contractually guaranteed minimum royalty amount. Payments are generally due quarterly. The Company recognizes revenue for sales-based royalty arrangements (including those for which the royalty exceeds any contractually guaranteed minimum royalty amount) as licensed products are sold by the licensee. If a sales-based royalty is not ultimately expected to exceed a contractually guaranteed minimum royalty amount, the minimum is recognized as revenue over the contractual period, if all other criteria of revenue recognition have been met. This sales-based output measure of progress and pattern of recognition best represents the value transferred to the licensee over the term of the arrangement, as well as the amount of consideration that the Company is entitled to receive in exchange for providing access to its trademarks.

Revenue from digital subscriptions is recognized on a gross basis and is recognized over the term of the subscription. The Company receives payments in advance of revenue recognition for subscriptions and these

payments are recorded as contract liabilities in the Company's unaudited condensed consolidated balance sheet. Related commission cost is included in selling, general and administrative expense in the unaudited condensed consolidated statement of operations. Revenue from digital advertising is recognized as the Company satisfies performance obligations pursuant to customer insertion orders.

The Company records reductions to revenue for estimated customer returns, allowances, markdowns, and discounts. The Company bases its estimates on historical rates of customer returns and allowances as well as the specific identification of outstanding returns, markdowns and allowances that have not yet been received by the Company. The actual amount of customer returns and allowances, which is inherently uncertain, may differ from the Company’s estimates. If the Company determines that actual or expected returns or allowances are significantly higher or lower than the reserves it established, it would record a reduction or increase, as appropriate, to net sales in the period in which it makes such a determination. Provisions for customer specific discounts are based on negotiated arrangements with certain major customers. Reserves for returns, allowances, markdowns, and discounts are included within customer refund liability and the value of inventory associated with reserves for sales returns are included within prepaid expenses and other current assets on the unaudited condensed consolidated balance sheet. At a minimum, the Company reviews and refines these estimates on a quarterly basis.

The following table presents the customer refund liability, as well as the associated value of inventory for the periods indicated:

(In thousands)	Balance as of September 30, 2021		Balance as of December 31, 2020		Balance as of September 30, 2020
Customer refund liability	$	174,274	$	203,399	$	197,496
Inventory associated with the reserves	$	50,544	$	57,867	$	50,779

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, included in other current and other long-term liabilities, and gift cards, included in accrued expenses, on the Company's unaudited condensed consolidated balance sheets. As of September 30, 2021, December 31, 2020, and September 30, 2020, contract liabilities were $24.3 million, $26.7 million and $64.9 million, respectively.

For the three and nine months ended September 30, 2021, the Company recognized $3.1 million and $10.8 million, respectively, of revenue that was previously included in contract liabilities as of December 31, 2020. For the three and nine months ended September 30, 2020, the Company recognized $9.9 million and $21.2 million, respectively, of revenue that was previously included in contract liabilities as of December 31, 2019. 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. Commissions related to subscription revenue are capitalized and recognized over the subscription period.

Shipping and Handling Costs

The Company charges customers shipping and handling fees based on contractual terms, which are recorded in net revenues. The Company incurs freight costs associated with shipping goods to customers. These costs are recorded as a component of cost of goods sold.

The Company also incurs outbound handling costs associated with preparing goods to ship to customers and certain costs to operate the Company’s distribution facilities. These costs are recorded as a component of selling, general and administrative expenses. For the three and nine months ended September 30, 2021, these costs totaled $13.8 million and $63.3 million, respectively, (three and nine months ended September 30, 2020 - $21.2 million and $61.2 million, respectively).

Equity Method Investment

Equity Method Investment

The Company has a common stock investment of 29.5% in Dome Corporation ("Dome"), the Company's Japanese licensee. The Company accounts for its investment in Dome under the equity method, given it has the ability to exercise significant influence, but not control, over Dome. The Company recorded its allocable share of Dome’s net income (loss) of $0 and $1.8 million for the three and nine months ended September 30, 2021, respectively, (three and nine months ended September 30, 2020 - $0 and $(1.4) million, respectively) within income

(loss) from equity method investment on the unaudited condensed consolidated statements of operations and as an adjustment to the invested balance within other long term assets on the unaudited condensed consolidated balance sheets. As of September 30, 2021, the carrying value of the Company's investment in Dome was $1.8 million. The Company's investment in Dome had no carrying value as of December 31, 2020 and September 30, 2020.

In addition to the investment in Dome, the Company has a license agreement with Dome. The Company recorded license revenues from Dome of $11.1 million and $22.9 million for the three and nine months ended September 30, 2021, respectively (three and nine months ended September 30, 2020 - $10.9 million and $17.4 million, respectively). As of September 30, 2021, December 31, 2020, and September 30, 2020, the Company had $8.9 million, $22.9 million, and $8.5 million, respectively, in licensing receivables outstanding, recorded in the prepaid expenses and other current assets line item within the Company's unaudited condensed consolidated balance sheets.

On March 2, 2020, as part of the Company's acquisition of Triple Pte. Ltd., the Company assumed 49.5% of common stock ownership in UA Sports (Thailand) Co., Ltd. (“UA Sports Thailand”). The Company accounts for its investment in UA Sports Thailand under the equity method, given it has the ability to exercise significant influence, but not control, over UA Sports Thailand. For the three and nine months ended September 30, 2021, the Company recorded the allocable share of UA Sports Thailand’s net income (loss) of $(921) thousand and $(873) thousand, respectively (three and nine months ended September 30, 2020 - $1.2 million and $1.8 million, respectively) within income (loss) from equity method investment on the unaudited condensed consolidated statements of operations and as an adjustment to the invested balance within other long term assets on the unaudited condensed consolidated balance sheets. As of September 30, 2021, December 31, 2020, and September 30, 2020, the carrying value of the Company’s investment in UA Sports Thailand was $4.7 million, $4.5 million and $3.7 million, respectively.

Recently Issued Accounting Standards

Recently Issued Accounting Standards

In August 2020, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2020-06 "Debt - Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity's Own Equity (Subtopic 815-40)" ("ASU 2020-06"). The amendment in this update simplifies the accounting for convertible instruments by reducing the number of accounting models available for convertible debt instruments and convertible preferred stock. This update also amends the guidance for the derivatives scope exception for contracts in an entity's own equity to reduce form-over-substance-based accounting conclusions and requires the application of the if-converted method for calculating diluted earnings per share. The update also requires entities to provide expanded disclosures about the terms and features of convertible instruments, how the instruments have been reported in the entity’s financial statements, and information about events, conditions, and circumstances that can affect how to assess the amount or timing of an entity’s future cash flows related to those instruments. The guidance is effective for interim and annual periods beginning after December 15, 2021. The Company currently does not expect this guidance to have a material impact on its unaudited condensed consolidated financial statements.

In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of Effects of Reference Rate Reform on Financial Reporting and then issued a subsequent amendment to the initial guidance under ASU 2021-01 (collectively Topic 848). Topic 848 provides practical expedients and exceptions for applying GAAP to contracts, hedging relationships, derivatives and other transactions affected by reference rate reform if certain criteria are met. The expedients and exceptions provided by the amendments in this update apply only to contracts, hedging relationships, derivatives and other transactions that reference the London interbank offered rate (“LIBOR”) or another reference rate expected to be discontinued as a result of reference rate reform. The Company adopted Topic 848 in the third quarter of Fiscal 2021. The adoption did not have an impact to the Company's unaudited condensed consolidated financial statements.

Fair Value of Financial Instruments

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.

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Summary of Significant Accounting Policies (Tables)

9 Months Ended

Sep. 30, 2021

Accounting Policies [Abstract]

Schedule of Cash and Cash Equivalents

The following table provides a reconciliation of cash, cash equivalents and restricted cash to the balances shown in the unaudited condensed consolidated statements of cash flows:

(In thousands)	September 30, 2021		December 31, 2020		September 30, 2020
Cash and cash equivalents	$	1,253,706	$	1,517,361	$	865,609
Restricted cash	12,696		11,154		8,926
Total cash, cash equivalents and restricted cash	$	1,266,402	$	1,528,515	$	874,535

Schedule of Accounts Receivable and Prepaid Expense and Other Current Assets Allowance for Doubtful Accounts

The following table illustrates the activity in the Company's allowance for doubtful accounts:

(In thousands)	Balance as of December 31, 2020		Increases (decreases) to Costs and Expenses		Write-Offs Net of Recoveries		Balance as of September 30, 2021
Allowance for doubtful accounts - within accounts receivable, net	$	20,350	$	(4,149)	$	(2,100)	$	14,101
Allowance for doubtful accounts - within prepaid expenses and other current assets	$	7,029	$	—	$	—	$	7,029

Schedule of Customer Refund Liability and Inventory Associated with the Reserves

The following table presents the customer refund liability, as well as the associated value of inventory for the periods indicated:

(In thousands)	Balance as of September 30, 2021		Balance as of December 31, 2020		Balance as of September 30, 2020
Customer refund liability	$	174,274	$	203,399	$	197,496
Inventory associated with the reserves	$	50,544	$	57,867	$	50,779

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Restructuring and Related Impairment Charges (Tables)

9 Months Ended

Sep. 30, 2021

Restructuring and Related Activities [Abstract]

Restructuring and Related Costs

The following table illustrates the costs recorded during the three and nine months ended September 30, 2021, as well as the Company's current estimates of the amount expected to be incurred in connection with the 2020 restructuring plan:

	Restructuring and Impairment Charges Recorded								Estimated Restructuring and Impairment Charges (1)
(In thousands)	Three months ended September 30,				Nine months ended September 30,				Remaining to be Incurred		Total to be Incurred under plan
	2021		2020		2021		2020
Costs recorded in cost of goods sold:
Contract-based royalties	$	—	$	—	$	—	$	—	$	—	$	11,608
Inventory write-offs	107		—		515		—		1,000		2,283
Total costs recorded in cost of goods sold	107		—		515		—		1,000		13,891
Net costs (recoveries) recorded in restructuring and related impairment charges:
Property and equipment impairment	3,064		3,307		3,064		26,211		—		32,344
Intangible asset impairment	—		—		—		—		—		4,351
Right-of-use asset impairment	—		—		—		290,813		—		293,495
Employee related costs	(424)		26,410		(845)		27,239		—		27,734
Contract exit costs (2)	10,794		38,520		15,041		53,462		58,999		153,048
Other asset write off	1,055		—		2,400		—		7,349		22,823
Other restructuring costs	2,167		1,995		6,722		12,533		8,028		27,314
Total costs recorded in restructuring and impairment charges	16,656		70,232		26,382		410,258		74,376		561,109
Total restructuring and impairment charges	$	16,763	$	70,232	$	26,897	$	410,258	$	75,376	$	575,000

(1) Estimated restructuring and impairment charges reflect the high-end of the range of the estimated charges expected by the Company in connection with the 2020 restructuring plan.

(2) Contract exit costs primarily consist of proposed lease exits of certain brand and factory house stores and office facilities, and proposed marketing and other contract exits.

All restructuring and related impairment charges are included in the Company's Corporate Other segment.

For the three months ended September 30, 2021, approximately $10.5 million of the charges are North America related, $5.9 million are Latin America related and $1.4 million are Asia-Pacific related. These charges were offset by a recovery of $1.1 million related to EMEA.

For the three months ended September 30, 2020, approximately $39.1 million of the charges are North America related, $11.5 million are EMEA related, $6.1 million are Latin America related, and $3.6 million are Asia-Pacific related.

For the nine months ended September 30, 2021, approximately $16.7 million of the charges are North America related, $9.2 million are Latin America related and $2.1 million are Asia-Pacific related. These charges were offset by a recovery of $1.1 million related to EMEA.

For the nine months ended September 30, 2020, approximately $367.4 million of the charges are North America related, $11.6 million are EMEA related, $6.4 million are Latin America related and $3.6 million are Asia-Pacific related.

Summary of Activity in the Restructuring Reserve

A summary of the activity in the restructuring reserve related to the Company's 2020 restructuring plan, as well as prior restructuring plans in 2018 and 2017 are as follows:

(In thousands)	Employee Related Costs		Contract Exit Costs		Other Restructuring Related Costs
Balance at January 1, 2021	$	12,868	$	61,642	$	6,098
Net additions (recoveries) charged to expense	(845)		17,814		(872)
Cash payments charged against reserve	(5,471)		(45,378)		(6,078)
Foreign exchange and other	(1,086)		(1,443)		140
Balance at September 30, 2021	$	5,466	$	32,635	$	(712)

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Leases (Tables)

9 Months Ended

Sep. 30, 2021

Leases [Abstract]

Lease costs

The following table illustrates operating and variable lease costs, included in selling, general and administrative expenses within the Company's unaudited condensed consolidated statement of operations, for the periods indicated:

	Three months ended September 30,				Nine months ended September 30,
(In thousands)	2021		2020		2021		2020
Operating lease costs	$	35,630	$	36,882	$	106,973	$	108,614
Variable lease costs	$	4,650	$	2,879	$	12,025	$	5,447

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

	September 30, 2021		December 31, 2020		September 30, 2020
Weighted average remaining lease term (in years)	8.84		9.12		9.24
Weighted average discount rate	3.73	%	3.83	%	3.82	%

Supplemental Cash Flow Information

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

	Three months ended September 30,				Nine months ended September 30,
(In thousands)	2021		2020		2021		2020
Cash paid for amounts included in the measurement of lease liabilities
Operating cash outflows from operating leases	$	44,161	$	37,810	$	135,035	$	113,784
Leased assets obtained in exchange for new operating lease liabilities	$	5,348	$	11,018	$	18,396	$	393,850

Operating lease liability maturity

The following table presents the future minimum lease payments under our operating lease liabilities as of September 30, 2021:

(In thousands)
Fiscal year ending December 31,
2021 (three months ended)	$	49,090
2022	164,404
2023	144,415
2024	124,609
2025	95,162
2026 and thereafter	453,252
Total lease payments	$	1,030,932
Less: Interest	160,289
Total present value of lease liabilities	$	870,643

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Credit Facility and Other Long Term Debt (Tables)

9 Months Ended

Sep. 30, 2021

Debt Disclosure [Abstract]

Components of Outstanding Debt

The Company's outstanding debt consisted of the following:

(In thousands)	As of September 30, 2021		As of December 31, 2020		As of September 30, 2020
1.50% Convertible Senior Notes due 2024	$	80,919	$	500,000	$	500,000
3.25% Senior Notes due 2026	600,000		600,000		600,000
Credit Facility borrowings	—		—		—
Total principal payments due	680,919		1,100,000		1,100,000
Unamortized debt discount on Convertible Senior Notes	(10,105)		(79,031)		(84,127)
Unamortized debt discount on Senior Notes	(1,194)		(1,385)		(1,448)
Unamortized debt issuance costs - Convertible Senior Notes	(1,086)		(8,763)		(9,403)
Unamortized debt issuance costs - Senior Notes	(2,536)		(2,940)		(3,074)
Unamortized debt issuance costs - Credit facility	(3,095)		(4,325)		(4,601)
Total amount outstanding	662,903		1,003,556		997,347
Less:
Current portion of long-term debt:
Credit Facility borrowings	—		—		—
Non-current portion of long-term debt	$	662,903	$	1,003,556	$	997,347

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Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2021

Fair Value Disclosures [Abstract]

Financial Assets and (Liabilities) Measured at Fair Value

Our 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, 2021						December 31, 2020						September 30, 2020
(In thousands)	Level 1		Level 2		Level 3		Level 1		Level 2		Level 3		Level 1		Level 2		Level 3
Derivative foreign currency contracts (see Note 8)	$	—	$	3,197	$	—	$	—	$	(22,122)	$	—	$	—	$	(203)	$	—
TOLI policies held by the Rabbi Trust	$	—	$	8,525	$	—	$	—	$	7,697	$	—	$	—	$	7,229	$	—
Deferred Compensation Plan obligations	$	—	$	(15,122)	$	—	$	—	$	(14,314)	$	—	$	—	$	(13,113)	$	—

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Risk Management and Derivatives (Tables)

9 Months Ended

Sep. 30, 2021

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivatives Balance Sheet Location

The following table presents the fair values of derivative instruments within the unaudited condensed consolidated balance sheets. Refer to Note 7 of the unaudited condensed consolidated financial statements for a discussion of the fair value measurements:

(In thousands)	Balance Sheet Classification	September 30, 2021		December 31, 2020		September 30, 2020
Derivatives designated as hedging instruments under ASC 815
Foreign currency contracts	Other current assets	$	6,424	$	—	$	5,659
Foreign currency contracts	Other long term assets	4,377		—		—
Total derivative assets designated as hedging instruments		$	10,801	$	—	$	5,659
Foreign currency contracts	Other current liabilities	$	7,123	$	17,601	$	4,942
Foreign currency contracts	Other long term liabilities	620		6,469		—
Total derivative liabilities designated as hedging instruments		$	7,743	$	24,070	$	4,942
Derivatives not designated as hedging instruments under ASC 815
Foreign currency contracts	Other current assets	$	4,935	$	2,384	$	5,373
Total derivative assets not designated as hedging instruments		$	4,935	$	2,384	$	5,373
Foreign currency contracts	Other current liabilities	$	2,242	$	6,464	$	1,714
Total derivative liabilities not designated as hedging instruments		$	2,242	$	6,464	$	1,714

Effects of Cash Flow Hedges

The following table presents the amounts in the unaudited condensed consolidated statements of operations in which the effects of cash flow hedges are recorded and the effects of cash flow hedge activity on these line items:

	Three months ended September 30,								Nine months ended September 30,
	2021				2020				2021				2020
(In thousands)	Total		Amount of Gain (Loss) on Cash Flow Hedge Activity		Total		Amount of Gain (Loss) on Cash Flow Hedge Activity		Total		Amount of Gain (Loss) on Cash Flow Hedge Activity		Total	Amount of Gain (Loss) on Cash Flow Hedge Activity
Net revenues	$	1,545,532	$	(1,953)	$	1,433,021	$	218	$	4,154,261	$	(7,477)	$3,070,901	$	3,495
Cost of goods sold	$	757,428	$	(3,947)	$	746,701	$	4,496	2,068,695		(8,586)		1,604,428	7,179
Interest income (expense), net	$	(9,261)	$	(9)	$	(14,955)	$	(9)	(36,705)		(27)		(32,251)	(27)
Other income (expense), net	$	(29,476)	$	—	$	(7,184)	$	4	(75,150)		—		(10,493)	25

Cash Flows in AOCI

The following tables present the amounts affecting the unaudited statements of comprehensive income (loss):

(In thousands)	Balance as of June 30, 2021		Amount of gain (loss) recognized in other comprehensive income (loss) on derivatives		Amount of gain (loss) reclassified from other comprehensive income (loss) into income		Balance as of September 30, 2021
Derivatives designated as cash flow hedges
Foreign currency contracts	$	(20,346)	$	14,459	$	(5,900)	$	13
Interest rate swaps	(522)		—		(9)		(513)
Total designated as cash flow hedges	$	(20,868)	$	14,459	$	(5,909)	$	(500)

(In thousands)	Balance as of December 31, 2020		Amount of gain (loss) recognized in other comprehensive income (loss) on derivatives		Amount of gain (loss) reclassified from other comprehensive income (loss) into income		Balance as of September 30, 2021
Derivatives designated as cash flow hedges
Foreign currency contracts	$	(25,908)	$	9,858	$	(16,063)	$	13
Interest rate swaps	(541)		—		(28)		$	(513)
Total designated as cash flow hedges	$	(26,449)	$	9,858	$	(16,091)	$	(500)

(In thousands)	Balance as of June 30, 2020		Amount of gain (loss) recognized in other comprehensive income (loss) on derivatives		Amount of gain (loss) reclassified from other comprehensive income (loss) into income		Balance as of September 30, 2020
Derivatives designated as cash flow hedges
Foreign currency contracts	$	26,200	$	(18,432)	$	4,701	$	3,066
Interest rate swaps	(559)		—		(9)		(550)
Total designated as cash flow hedges	$	25,641	$	(18,432)	$	4,692	$	2,516

(In thousands)	Balance as of December 31, 2019		Amount of gain (loss) recognized in other comprehensive income (loss) on derivatives		Amount of gain (loss) reclassified from other comprehensive income (loss) into income		Balance as of September 30, 2020
Derivatives designated as cash flow hedges
Foreign currency contracts	$	(6,005)	$	19,727	$	10,655	$	3,066
Interest rate swaps	(577)		—		(27)		(550)
Total designated as cash flow hedges	$	(6,582)	$	19,727	$	10,628	$	2,516

Schedule of Fair Value Hedging Activity

The following table presents the amounts in the unaudited condensed consolidated statements of operations in which the effects of undesignated derivative instruments are recorded and the effects of fair value hedge activity on these line items:

	Three months ended September 30,								Nine months ended September 30,
	2021				2020				2021				2020
(In thousands)	Total		Amount of Gain (Loss) on Fair Value Hedge Activity		Total		Amount of Gain (Loss) on Fair Value Hedge Activity		Total		Amount of Gain (Loss) on Fair Value Hedge Activity		Total		Amount of Gain (Loss) on Fair Value Hedge Activity
Other income (expense), net	$	(29,476)	$	(2,382)	$	(7,184)	$	(962)	$	(75,150)	$	(3,197)	$	(10,493)	$	1,022

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Earnings per Share (Tables)

9 Months Ended

Sep. 30, 2021

Earnings Per Share [Abstract]

Schedule of Reconciliation of Basic Earnings per Share to Diluted Earnings per Share

The following represents a reconciliation from basic income (loss) per share to diluted income (loss) per share:

	Three Months Ended September 30,				Nine Months Ended September 30,
(In thousands, except per share amounts)	2021		2020		2021		2020
Numerator
Net income (loss)	$	113,444	$	38,946	$	250,403	$	(733,630)
Denominator
Weighted average common shares outstanding Class A, B and C	470,002		454,541		461,908		453,847
Effect of dilutive securities Class A, B, and C	3,114		2,133		3,010		—
Weighted average common shares and dilutive securities outstanding Class A, B, and C	473,116		456,674		464,918		453,847
Basic net income (loss) per share of Class A, B and C common stock	$	0.24	$	0.09	$	0.54	$	(1.62)
Diluted net income (loss) per share of Class A, B and C common stock	$	0.24	$	0.09	$	0.54	$	(1.62)

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Segment Data and Disaggregated Revenue (Tables)

9 Months Ended

Sep. 30, 2021

Segment Reporting [Abstract]

Reconciliation of Revenue from Segments to Consolidated

Intercompany balances were eliminated for separate disclosure:

	Three Months Ended September 30,				Nine Months Ended September 30,
(In thousands)	2021		2020		2021		2020
Net revenues
North America	$	1,035,862	$	962,565	$	2,747,082	$	2,021,247
EMEA	241,201		210,111		642,308		437,140
Asia-Pacific	211,950		178,895		614,539		397,846
Latin America	56,380		44,338		151,203		108,573
Corporate Other (1)	139		37,112		(871)		106,095
Total net revenues	$	1,545,532	$	1,433,021	$	4,154,261	$	3,070,901

Reconciliation of Operating Profit (Loss) from Segments to Consolidated

	Three Months Ended September 30,				Nine Months Ended September 30,
(In thousands)	2021		2020		2021		2020
Operating income (loss)
North America	$	292,367	$	224,593	$	728,698	$	251,579
EMEA	41,772		40,834		108,350		43,840
Asia-Pacific	40,529		19,248		111,088		(30,040)
Latin America	10,831		1,802		18,289		(50,756)
Corporate Other (1)	(213,435)		(227,907)		(566,266)		(883,907)
Total operating income (loss)	172,064		58,570		400,159		(669,284)
Interest expense, net	(9,261)		(14,955)		(36,705)		(32,251)
Other income (expense), net	(29,476)		(7,184)		(75,150)		(10,493)
Income (loss) before income taxes	$	133,327	$	36,431	$	288,304	$	(712,028)

Net Revenues by Product Category

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

	Three Months Ended September 30,				Nine Months Ended September 30,
(In thousands)	2021		2020		2021		2020
Apparel	$	1,058,231	$	927,041	$	2,742,465	$	1,951,186
Footwear	329,718		298,687		981,406		693,464
Accessories	126,345		145,060		355,244		268,912
Net Sales	1,514,294		1,370,788		4,079,115		2,913,562
License revenues	31,099		25,121		76,017		51,244
Corporate Other (1)	139		37,112		(871)		106,095
Total net revenues	$	1,545,532	$	1,433,021	$	4,154,261	$	3,070,901

	Three Months Ended September 30,				Nine Months Ended September 30,
(In thousands)	2021		2020		2021		2020
Wholesale	$	910,655	$	830,478	$	2,477,853	$	1,721,432
Direct-to-consumer	603,639		540,310		1,601,262		1,192,130
Net Sales	1,514,294		1,370,788		4,079,115		2,913,562
License revenues	31,099		25,121		76,017		51,244
Corporate Other (1)	139		37,112		(871)		106,095
Total net revenues	$	1,545,532	$	1,433,021	$	4,154,261	$	3,070,901

(1) Prior to Fiscal 2021, the Company's Connected Fitness segment was separately disclosed, however, effective January 1, 2021, Corporate Other now includes the remaining Connected Fitness business consisting of MMR for Fiscal 2021 and the entire Connected Fitness business for Fiscal 2020. All prior periods were recast to conform to the current period presentation. Such reclassifications did not affect total consolidated net revenues, consolidated income from operations or consolidated net income (see Note 1 to the unaudited condensed consolidated financial statements).

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Summary of Significant Accounting Policies - Cash and Cash Equivalents (Details) - USD ($) $ in Thousands	Sep. 30, 2021	Dec. 31, 2020	Sep. 30, 2020	Dec. 31, 2019
Accounting Policies [Abstract]
Cash and cash equivalents	$ 1,253,706	$ 1,517,361	$ 865,609
Restricted cash	12,696	11,154	8,926
Total cash, cash equivalents and restricted cash	$ 1,266,402	$ 1,528,515	$ 874,535	$ 796,008

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Summary of Significant Accounting Policies (Details) - Customer Concentration Risk	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020	Dec. 31, 2020
Accounts Receivable | None
Business Acquisition [Line Items]
Concentration risk, percentage				10.00%	10.00%
Accounts Receivable | One
Business Acquisition [Line Items]
Concentration risk, percentage			10.00%
Net Revenue | None
Business Acquisition [Line Items]
Concentration risk, percentage		10.00%		10.00%
Net Revenue | One
Business Acquisition [Line Items]
Concentration risk, percentage	10.00%		10.00%

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Summary of Significant Accounting Policies - Accounts Receivable and Doubtful Accounts (Details) $ in Thousands	9 Months Ended
	Sep. 30, 2021 USD ($)
Accounts Receivable, Allowance for Credit Loss [Roll Forward]
Beginning Balance	$ 20,350
Increases (decreases) to Costs and Expenses	(4,149)
Write-Offs Net of Recoveries	(2,100)
Ending Balance	14,101
Prepaid Expense and Other Current Assets, Allowance for Credit Loss [Roll Forward]
Beginning Balance	7,029
Increases (decreases) to Costs and Expenses	0
Write-Offs Net of Recoveries	0
Ending Balance	$ 7,029

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Summary of Significant Accounting Policies - Revenue Recognition/Advertising Costs/Equity Method Investments (Details) - USD ($)	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020	Dec. 31, 2020	Mar. 02, 2020
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Contract liability	$ 24,300,000	$ 64,900,000	$ 24,300,000	$ 64,900,000	$ 26,700,000
Revenue recognized	3,100,000	9,900,000	10,800,000	21,200,000
Shipping and handling costs	13,800,000	21,200,000	63,300,000	61,200,000
Income (loss) from equity method investments	(921,000)	(1,199,000)	969,000	(6,906,000)
Net revenues	$ 1,545,532,000	1,433,021,000	$ 4,154,261,000	3,070,901,000
Dome Corporation
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Ownership percentage	29.50%		29.50%
Income (loss) from equity method investments	$ 0	0	$ 1,800,000	(1,400,000)
Investment	1,800,000	0	1,800,000	0	0
Dome Corporation | Licensing Receivable
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Accounts receivable, net	8,900,000	8,500,000	8,900,000	8,500,000	22,900,000
Dome Corporation | License
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Net revenues	11,100,000	10,900,000	22,900,000	17,400,000
UA Sports (Thailand) Co., Ltd
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Ownership percentage						49.50%
Income (loss) from equity method investments	(921,000)	1,200,000	(873,000)	1,800,000
Investment	$ 4,700,000	$ 3,700,000	4,700,000	3,700,000	4,500,000
Customer Refund Liability
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Reserves for customer returns allowances markdowns and discounts			174,274,000	197,496,000	203,399,000
Inventory Associated with the Reserves
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Reserves for customer returns allowances markdowns and discounts			$ 50,544,000	$ 50,779,000	$ 57,867,000

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Restructuring and Related Impairment Charges - 2020 restructuring Plan (Details) - 2020 Restructuring Plan - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020	Dec. 31, 2020
Restructuring Cost and Reserve [Line Items]
Restructuring and related impairment charges	$ 16,763	$ 70,232	$ 26,897	$ 410,258
Restructuring and related impairment charges recorded to date	499,600		499,600
Cash Restructuring Charges
Restructuring Cost and Reserve [Line Items]
Expected restructuring costs					$ 199,000
Facilities and Lease Terminations
Restructuring Cost and Reserve [Line Items]
Expected restructuring costs					14,000
Employee Related Costs
Restructuring Cost and Reserve [Line Items]
Expected restructuring costs					28,000
Contract Termination And Other Restructuring
Restructuring Cost and Reserve [Line Items]
Expected restructuring costs					157,000
Non-Cash Charges
Restructuring Cost and Reserve [Line Items]
Expected restructuring costs					376,000
Long-Lived Asset Impairment
Restructuring Cost and Reserve [Line Items]
Expected restructuring costs					291,000
Intangible and Other Asset Impairment
Restructuring Cost and Reserve [Line Items]
Expected restructuring costs					85,000
Minimum
Restructuring Cost and Reserve [Line Items]
Expected restructuring costs	525,000		525,000		550,000
Maximum
Restructuring Cost and Reserve [Line Items]
Expected restructuring costs	$ 575,000		$ 575,000		$ 600,000

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Restructuring and Related Impairment Charges - Summary of Costs (Details) - USD ($) $ in Thousands	3 Months Ended			9 Months Ended		12 Months Ended
	Dec. 31, 2021	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020	Dec. 31, 2021
Restructuring Cost and Reserve [Line Items]
Total costs recorded in restructuring and impairment charges		$ 16,656	$ 74,201	$ 26,382	$ 549,601
Corporate Other | North America
Restructuring Cost and Reserve [Line Items]
Total costs recorded in restructuring and impairment charges		10,500	39,100	16,700	367,400
Corporate Other | EMEA
Restructuring Cost and Reserve [Line Items]
Total costs recorded in restructuring and impairment charges		(1,100)	11,500	(1,100)	11,600
Corporate Other | Asia-Pacific
Restructuring Cost and Reserve [Line Items]
Total costs recorded in restructuring and impairment charges		1,400	3,600	2,100	3,600
Corporate Other | Latin America
Restructuring Cost and Reserve [Line Items]
Total costs recorded in restructuring and impairment charges		5,900	6,100	9,200	6,400
2020 Restructuring Plan
Restructuring Cost and Reserve [Line Items]
Contract-based royalties		0	0	0	0
Inventory write-offs		107	0	515	0
Property and equipment impairment		3,064	3,307	3,064	26,211
Intangible asset impairment		0	0	0	0
Right-of-use asset impairment		0	0	0	290,813
Employee related costs		(424)	26,410	(845)	27,239
Contract exit costs		10,794	38,520	15,041	53,462
Other asset write off		1,055	0	2,400	0
Other restructuring costs		2,167	1,995	6,722	12,533
Restructuring and related impairment charges		16,763	70,232	26,897	410,258
2020 Restructuring Plan | Cost of goods sold
Restructuring Cost and Reserve [Line Items]
Total costs recorded in restructuring and impairment charges		107	0	515	0
2020 Restructuring Plan | Restructuring and impairment charges
Restructuring Cost and Reserve [Line Items]
Total costs recorded in restructuring and impairment charges		$ 16,656	$ 70,232	$ 26,382	$ 410,258
2020 Restructuring Plan | Forecast
Restructuring Cost and Reserve [Line Items]
Contract-based royalties	$ 0					$ 11,608
Inventory write-offs	1,000					2,283
Property and equipment impairment	0					32,344
Intangible asset impairment	0					4,351
Right-of-use asset impairment	0					293,495
Employee related costs	0					27,734
Contract exit costs	58,999					153,048
Other asset write off	7,349					22,823
Other restructuring costs	8,028					27,314
Restructuring and related impairment charges	75,376					575,000
2020 Restructuring Plan | Forecast | Cost of goods sold
Restructuring Cost and Reserve [Line Items]
Total costs recorded in restructuring and impairment charges	1,000					13,891
2020 Restructuring Plan | Forecast | Restructuring and impairment charges
Restructuring Cost and Reserve [Line Items]
Total costs recorded in restructuring and impairment charges	$ 74,376					$ 561,109

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Restructuring and Related Impairment Charges - Restructuring Reserve (Details) - USD ($) $ in Thousands	3 Months Ended	9 Months Ended
	Sep. 30, 2021	Sep. 30, 2021
Employee Related Costs | Restructuring Plan, 2020, 2018 and 2017
Restructuring Reserve [Roll Forward]
Balance at January 1, 2021		$ 12,868
Net additions (recoveries) charged to expense		(845)
Cash payments charged against reserve		(5,471)
Foreign exchange and other		(1,086)
Balance at September 30, 2021	$ 5,466	5,466
Contract Exit Costs | Restructuring Plan, 2020, 2018 and 2017
Restructuring Reserve [Roll Forward]
Balance at January 1, 2021		61,642
Net additions (recoveries) charged to expense		17,814
Cash payments charged against reserve		(45,378)
Foreign exchange and other		(1,443)
Balance at September 30, 2021	32,635	32,635
Other Restructuring Related Costs | Restructuring Plan, 2020, 2018 and 2017
Restructuring Reserve [Roll Forward]
Balance at January 1, 2021		6,098
Net additions (recoveries) charged to expense		(872)
Cash payments charged against reserve		(6,078)
Foreign exchange and other		140
Balance at September 30, 2021	(712)	(712)
Abandoned Facilities and Write Off of Fixed Assets | 2020 Restructuring Plan
Restructuring Reserve [Roll Forward]
Net additions (recoveries) charged to expense	$ 6,400	$ 10,300

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Leases - Leases Costs (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020	Dec. 31, 2020
Leases [Abstract]
Rent waivers	$ 2,200	$ 1,000	$ 5,100	$ 3,400
Operating lease costs	35,630	36,882	106,973	108,614
Variable lease payments	$ 4,650	$ 2,879	$ 12,025	$ 5,447
Weighted average remaining lease term (in years)	8 years 10 months 2 days	9 years 2 months 26 days	8 years 10 months 2 days	9 years 2 months 26 days	9 years 1 month 13 days
Weighted average discount rate	3.73%	3.82%	3.73%	3.82%	3.83%
Operating cash outflows from operating leases	$ 44,161	$ 37,810	$ 135,035	$ 113,784
Leased assets obtained in exchange for new operating lease liabilities	5,348	$ 11,018	18,396	$ 393,850
Leases not yet commenced	$ 12,200		$ 12,200

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Leases - Maturities of Lease Liabilities (Details) $ in Thousands	Sep. 30, 2021 USD ($)
Leases [Abstract]
2021 (three months ended)	$ 49,090
2022	164,404
2023	144,415
2024	124,609
2025	95,162
2026 and thereafter	453,252
Total lease payments	1,030,932
Less: Interest	160,289
Total present value of lease liabilities	$ 870,643

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Credit Facility and Other Long Term Debt - Components of Convertible Senior Notes (Details) - USD ($) $ in Thousands	Sep. 30, 2021	Dec. 31, 2020	Sep. 30, 2020	May 31, 2020	Sep. 30, 2016
Debt Instrument [Line Items]
Total principal payments due	$ 680,919	$ 1,100,000	$ 1,100,000
Total amount outstanding	662,903	1,003,556	997,347
Credit Facility borrowings	0	0	0
Non-current portion of long-term debt	662,903	1,003,556	997,347
Credit Facility
Debt Instrument [Line Items]
Total principal payments due	0	0	0
Unamortized debt issuance costs - Credit facility	(3,095)	(4,325)	(4,601)
1.50% Convertible Senior Notes
Debt Instrument [Line Items]
Unamortized debt issuance costs - Credit facility				$ (10,000)
1.50% Convertible Senior Notes | Convertible Notes
Debt Instrument [Line Items]
Total principal payments due	80,919	500,000	500,000
Unamortized debt discount	(10,105)	(79,031)	(84,127)
Unamortized debt issuance costs - Credit facility	(1,086)	(8,763)	(9,403)
1.50% Convertible Senior Notes | Senior Notes
Debt Instrument [Line Items]
Unamortized debt issuance costs - Credit facility				$ (12,300)
3.25% Senior Notes | Senior Notes
Debt Instrument [Line Items]
Total principal payments due	600,000	600,000	600,000
Unamortized debt discount	(1,194)	(1,385)	(1,448)
Unamortized debt issuance costs - Credit facility	$ (2,536)	$ (2,940)	$ (3,074)		$ (5,400)

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Credit Facility and Other Long Term Debt - Credit Facility (Details)		1 Months Ended	3 Months Ended	9 Months Ended
	Mar. 08, 2019 USD ($)	May 31, 2021	Sep. 30, 2020 USD ($)	Sep. 30, 2021 USD ($)	Sep. 30, 2020 USD ($)	Dec. 31, 2020 USD ($)	May 31, 2020 USD ($)
Debt Instrument [Line Items]
Outstanding under credit facility			$ 1,100,000,000	$ 680,919,000	$ 1,100,000,000	$ 1,100,000,000
LIBOR | Minimum
Debt Instrument [Line Items]
Variable rate				1.25%
LIBOR | Maximum
Debt Instrument [Line Items]
Variable rate				1.75%
Base Rate | Minimum
Debt Instrument [Line Items]
Variable rate				0.25%
Base Rate | Maximum
Debt Instrument [Line Items]
Variable rate				0.75%
Letter of Credit
Debt Instrument [Line Items]
Maximum borrowing capacity				$ 50,000,000
Letters of credit outstanding			15,500,000	4,400,000	15,500,000	4,300,000
Credit Agreement
Debt Instrument [Line Items]
Maximum borrowing capacity				300,000,000
Credit Agreement | Revolving Credit Facility
Debt Instrument [Line Items]
Credit agreement, term	5 years
Maximum borrowing capacity	$ 1,250,000,000						$ 1,100,000,000
Outstanding under credit facility			$ 0	$ 0	$ 0	$ 0
Covenant, consolidated EBITDA to consolidated interest expense ratio, greater than or equal		3.50
Debt, leverage covenant, consolidated total indebtedness to consolidated EBITDA ratio less than or equal		3.25
Weighted average interest rate (percent)			2.10%		2.30%
Commitment fee percentage				0.25%

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Credit Facility and Other Long Term Debt - Senior Notes, Capped Call Transaction and Interest Expense (Details) $ / shares in Units, shares in Millions	1 Months Ended			3 Months Ended	9 Months Ended
	Aug. 31, 2021 USD ($) shares	May 31, 2021 USD ($) shares	May 31, 2020 USD ($) d $ / shares	Sep. 30, 2021 USD ($)	Sep. 30, 2021 USD ($)	Sep. 30, 2020 USD ($)	Dec. 31, 2020 USD ($)	Sep. 30, 2016 USD ($)	Jun. 30, 2016 USD ($)
Debt Instrument [Line Items]
Repayment of credit facility			$ 439,900,000
Loss on conversion of notes					$ 58,526,000	$ 0
Proceeds from option contract termination	$ 38,600,000	$ 53,000,000
Effective interest rate,percentage				6.80%	6.80%
1.50% Convertible Senior Notes
Debt Instrument [Line Items]
Stated interest rate, percentage			1.50%
Aggregate principal			$ 500,000,000	$ 80,900,000	$ 80,900,000
Proceeds from debt offering			488,800,000
Payment of cap call transaction			$ 47,900,000
Convertible notes exchanged	169,100,000	250,000,000		169,000,000	419,000,000
Repayments of convertible notes	$ 207,000,000	$ 300,000,000
Loss on conversion of notes				$ 23,800,000	$ 58,500,000
Initial conversion rate			0.1018589
Debt conversion price (in usd per share) | $ / shares			$ 9.82
Trading days (whether or not consecutive) | d			20
Consecutive trading days | d			30
Percentage of stock price			130.00%
Business period			5 days
Measurement period			5 days
Measurement period, percentage			98.00%
Redemption price, percentage of principal repurchased			100.00%
Cap call transaction cap price per share (in usd per share) | $ / shares			$ 13.4750
Premium over last reported sale price, percentage			75.00%
Deferred financing costs			$ 10,000,000
1.50% Convertible Senior Notes | Additional Paid-in Capital
Debt Instrument [Line Items]
Deferred financing costs			2,200,000
1.50% Convertible Senior Notes | Senior Notes
Debt Instrument [Line Items]
Deferred financing costs			$ 12,300,000
1.50% Convertible Senior Notes | Class C Common Stock
Debt Instrument [Line Items]
Stock issued in exchange of convertible notes (shares) | shares	7.7	11.1
3.25% Senior Notes | Senior Notes
Debt Instrument [Line Items]
Stated interest rate, percentage				3.25%	3.25%				3.25%
Aggregate principal									$ 600,000,000
Deferred financing costs				$ 2,536,000	$ 2,536,000	$ 3,074,000	$ 2,940,000	$ 5,400,000

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Credit Facility and Other Long Term Debt - Interest Expense Related to Convertible Senior Notes (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Debt Disclosure [Abstract]
Interest income (expense), net	$ (9,261)	$ (14,955)	$ (36,705)	$ (32,251)

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Commitments and Contingencies (Details) $ in Thousands	1 Months Ended			2 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2020 USD ($) case	Dec. 17, 2019 plaintiff	Jun. 30, 2016 USD ($)	Oct. 21, 2020 case	Jul. 31, 2018 case	Sep. 30, 2021 USD ($)	Sep. 30, 2020 USD ($)	Dec. 31, 2014 USD ($)	Dec. 31, 2020 USD ($)	Mar. 23, 2017 case
Loss Contingencies [Line Items]
Investment in parcels	$ 680,871					$ 601,700	$ 680,871		$ 658,678
Purchases of land						$ 57,660	$ 71,639
Land
Loss Contingencies [Line Items]
Purchases of land			$ 70,300
Land | Sagamore
Loss Contingencies [Line Items]
Investment in parcels								$ 72,000
Purchases of land								35,000
Payment for lease termination								30,600
Development costs								$ 6,400
Under Armour Securities Litigation, Case No. 17-cv-00388-RDB | Pending Litigation
Loss Contingencies [Line Items]
Pending claims | case										3
Securities Class Actions
Loss Contingencies [Line Items]
Number of plaintiffs | plaintiff		2
Derivative Complaints
Loss Contingencies [Line Items]
Number of complaints | case	2			3	2

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Fair Value Measurements - Financial Assets And (Liabilities) Measured At Fair Value (Details) - USD ($) $ in Thousands	Sep. 30, 2021	Dec. 31, 2020	Sep. 30, 2020
Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
TOLI policies held by the Rabbi Trust	$ 0	$ 0	$ 0
Deferred Compensation Plan obligations	0	0	0
Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
TOLI policies held by the Rabbi Trust	8,525	7,697	7,229
Deferred Compensation Plan obligations	(15,122)	(14,314)	(13,113)
Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
TOLI policies held by the Rabbi Trust	0	0	0
Deferred Compensation Plan obligations	0	0	0
Foreign currency contracts | Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative assets (liabilities)	0	0	0
Foreign currency contracts | Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative assets (liabilities)	3,197	(22,122)	(203)
Foreign currency contracts | Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative assets (liabilities)	$ 0	$ 0	$ 0

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Fair Value Measurements - Narrative (Details) - USD ($)	1 Months Ended		3 Months Ended	9 Months Ended
	Aug. 31, 2021	May 31, 2021	Sep. 30, 2021	Sep. 30, 2021	Dec. 31, 2020	Sep. 30, 2020
1.50% Convertible Senior Notes
Debt Instrument [Line Items]
Convertible notes exchanged	$ 169,100,000	$ 250,000,000	$ 169,000,000	$ 419,000,000
Convertible Senior Notes
Debt Instrument [Line Items]
Fair value			150,200,000	150,200,000	$ 828,200,000	$ 624,800,000
Senior Notes
Debt Instrument [Line Items]
Fair value			$ 622,500,000	$ 622,500,000	$ 602,600,000	$ 566,600,000

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Risk Management and Derivatives - Balance Sheet Location (Details) - USD ($) $ in Thousands	Sep. 30, 2021	Dec. 31, 2020	Sep. 30, 2020
Designated as Hedging Instrument
Derivatives, Fair Value [Line Items]
Derivative assets	$ 10,801	$ 0	$ 5,659
Derivative liabilities	7,743	24,070	4,942
Designated as Hedging Instrument | Foreign currency contracts | Other current assets
Derivatives, Fair Value [Line Items]
Derivative assets	6,424	0	5,659
Designated as Hedging Instrument | Foreign currency contracts | Other long term assets
Derivatives, Fair Value [Line Items]
Derivative assets	4,377	0	0
Designated as Hedging Instrument | Foreign currency contracts | Other current liabilities
Derivatives, Fair Value [Line Items]
Derivative liabilities	7,123	17,601	4,942
Designated as Hedging Instrument | Foreign currency contracts | Other long term liabilities
Derivatives, Fair Value [Line Items]
Derivative liabilities	620	6,469	0
Not Designated as Hedging Instrument
Derivatives, Fair Value [Line Items]
Derivative assets	4,935	2,384	5,373
Derivative liabilities	2,242	6,464	1,714
Not Designated as Hedging Instrument | Foreign currency contracts | Other current assets
Derivatives, Fair Value [Line Items]
Derivative assets	4,935	2,384	5,373
Not Designated as Hedging Instrument | Foreign currency contracts | Other current liabilities
Derivatives, Fair Value [Line Items]
Derivative liabilities	$ 2,242	$ 6,464	$ 1,714

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Risk Management and Derivatives - Hedging Activity (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Derivative Instruments, Gain (Loss) [Line Items]
Net revenues	$ 1,545,532	$ 1,433,021	$ 4,154,261	$ 3,070,901
Cost of goods sold	757,428	746,701	2,068,695	1,604,428
Interest income (expense), net	(9,261)	(14,955)	(36,705)	(32,251)
Other income (expense), net	(29,476)	(7,184)	(75,150)	(10,493)
Net revenues
Derivative Instruments, Gain (Loss) [Line Items]
Amount of Gain (Loss) on Cash Flow Hedge Activity	(1,953)	218	(7,477)	3,495
Cost of goods sold
Derivative Instruments, Gain (Loss) [Line Items]
Amount of Gain (Loss) on Cash Flow Hedge Activity	(3,947)	4,496	(8,586)	7,179
Interest income (expense), net
Derivative Instruments, Gain (Loss) [Line Items]
Amount of Gain (Loss) on Cash Flow Hedge Activity	(9)	(9)	(27)	(27)
Other income (expense), net
Derivative Instruments, Gain (Loss) [Line Items]
Amount of Gain (Loss) on Cash Flow Hedge Activity	$ 0	$ 4	$ 0	$ 25

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Risk Management and Derivatives - Derivative Other Comprehensive Income Rollforward (Details) - Cash Flow Hedges - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Derivative Asset (Liability) Rollforward [Roll Forward]
Derivative assets (liabilities), beginning	$ (20,868)	$ 25,641	$ (26,449)	$ (6,582)
Amount of gain (loss) recognized in other comprehensive income (loss) on derivatives	14,459	(18,432)	9,858	19,727
Amount of gain (loss) reclassified from other comprehensive income (loss) into income	(5,909)	4,692	(16,091)	10,628
Derivative assets (liabilities), ending	(500)	2,516	(500)	2,516
Foreign currency contracts
Derivative Asset (Liability) Rollforward [Roll Forward]
Derivative assets (liabilities), beginning	(20,346)	26,200	(25,908)	(6,005)
Amount of gain (loss) recognized in other comprehensive income (loss) on derivatives	14,459	(18,432)	9,858	19,727
Amount of gain (loss) reclassified from other comprehensive income (loss) into income	(5,900)	4,701	(16,063)	10,655
Derivative assets (liabilities), ending	13	3,066	13	3,066
Interest rate swaps
Derivative Asset (Liability) Rollforward [Roll Forward]
Derivative assets (liabilities), beginning	(522)	(559)	(541)	(577)
Amount of gain (loss) recognized in other comprehensive income (loss) on derivatives	0	0	0	0
Amount of gain (loss) reclassified from other comprehensive income (loss) into income	(9)	(9)	(28)	(27)
Derivative assets (liabilities), ending	$ (513)	$ (550)	$ (513)	$ (550)

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Risk Management and Derivatives - Effects of Undesignated Derivatives and Fair Value Hedge Activities (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Derivative [Line Items]
Other income (expense), net	$ (29,476)	$ (7,184)	$ (75,150)	$ (10,493)
Other income (expense), net
Derivative [Line Items]
Gain (Loss) on Fair Value Hedge Activity	$ (2,382)	$ (962)	$ (3,197)	$ 1,022

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Risk Management and Derivatives - Narrative (Details) $ in Millions	9 Months Ended
	Sep. 30, 2021 USD ($) d	Dec. 31, 2020 USD ($) d	Sep. 30, 2020 USD ($) d
Derivative [Line Items]
Minimum maturity	1 month
Maximum maturity	24 months
Interest rate swaps
Derivative [Line Items]
Number of derivative contracts outstanding | d	0	0	0
Not Designated as Hedging Instrument | Foreign currency contracts
Derivative [Line Items]
Notional amount	$ 431.1	$ 313.1	$ 262.9
Cash Flow Hedges | Foreign currency contracts
Derivative [Line Items]
Notional amount	$ 739.1	$ 812.5	$ 301.2

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Provision for Income Taxes (Details)	3 Months Ended
	Sep. 30, 2021	Sep. 30, 2020
Income Tax Disclosure [Abstract]
Effective tax rate	14.20%	(10.20%)

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Earnings per Share - Schedule Of Reconciliation Of Basic Earnings Per Share To Diluted Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Numerator
Net income (loss)	$ 113,444	$ 38,946	$ 250,403	$ (733,630)
Denominator
Weighted average common shares outstanding Class A, B and C (in shares)	470,002	454,541	461,908	453,847
Effect of dilutive securities Class A, B, and C (in shares)	3,114	2,133	3,010	0
Weighted average common shares and dilutive securities outstanding Class A, B, and C (in shares)	473,116	456,674	464,918	453,847
Basic net income (loss) per share of Class A, B and C common stock (in dollars per share)	$ 0.24	$ 0.09	$ 0.54	$ (1.62)
Diluted net income (loss) per share of Class A, B and C common stock (in dollars per share)	$ 0.24	$ 0.09	$ 0.54	$ (1.62)
Antidilutive securities (in shares)	500	7,300	1,900	0

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Segment Data and Disaggregated Revenue - Geographic Distribution Of The Company's Net Revenues And Operating Income (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Segment Reporting Information [Line Items]
Net revenues	$ 1,545,532	$ 1,433,021	$ 4,154,261	$ 3,070,901
Operating income (loss)	172,064	58,570	400,159	(669,284)
Interest income (expense), net	(9,261)	(14,955)	(36,705)	(32,251)
Other income (expense), net	(29,476)	(7,184)	(75,150)	(10,493)
Income (loss) before income taxes	133,327	36,431	288,304	(712,028)
Corporate Other
Segment Reporting Information [Line Items]
Net revenues	139	37,112	(871)	106,095
Operating income (loss)	(213,435)	(227,907)	(566,266)	(883,907)
North America | Operating Segments
Segment Reporting Information [Line Items]
Net revenues	1,035,862	962,565	2,747,082	2,021,247
Operating income (loss)	292,367	224,593	728,698	251,579
EMEA | Operating Segments
Segment Reporting Information [Line Items]
Net revenues	241,201	210,111	642,308	437,140
Operating income (loss)	41,772	40,834	108,350	43,840
Asia-Pacific | Operating Segments
Segment Reporting Information [Line Items]
Net revenues	211,950	178,895	614,539	397,846
Operating income (loss)	40,529	19,248	111,088	(30,040)
Latin America | Operating Segments
Segment Reporting Information [Line Items]
Net revenues	56,380	44,338	151,203	108,573
Operating income (loss)	$ 10,831	$ 1,802	$ 18,289	$ (50,756)

XML

Segment Data and Disaggregated Revenue - Net Revenues By Product Category and Distribution Channel (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Segment Reporting Information [Line Items]
Net revenues	$ 1,545,532	$ 1,433,021	$ 4,154,261	$ 3,070,901
Corporate Other
Segment Reporting Information [Line Items]
Net revenues	139	37,112	(871)	106,095
Wholesale
Segment Reporting Information [Line Items]
Revenues	910,655	830,478	2,477,853	1,721,432
Direct-to-consumer
Segment Reporting Information [Line Items]
Revenues	603,639	540,310	1,601,262	1,192,130
Apparel
Segment Reporting Information [Line Items]
Revenues	1,058,231	927,041	2,742,465	1,951,186
Footwear
Segment Reporting Information [Line Items]
Revenues	329,718	298,687	981,406	693,464
Accessories
Segment Reporting Information [Line Items]
Revenues	126,345	145,060	355,244	268,912
Net Sales
Segment Reporting Information [Line Items]
Revenues	1,514,294	1,370,788	4,079,115	2,913,562
License revenues
Segment Reporting Information [Line Items]
Revenues	$ 31,099	$ 25,121	$ 76,017	$ 51,244