PART I. FINANCIAL INFORMATION This section provides the unaudited condensed consolidated financial statements and management's discussion and analysis for the first quarter ITEM 1. FINANCIAL STATEMENTS The company presents its unaudited condensed consolidated financial statements, including balance sheets, statements of operations, comprehensive income, stockholders' equity, and cash flows, with detailed explanatory notes Unaudited Condensed Consolidated Balance Sheets This section provides a snapshot of the company's financial position, detailing assets, liabilities, and stockholders' equity at specific reporting dates Condensed Consolidated Balance Sheet Highlights (in thousands) | Metric | March 31, 2021 | December 31, 2020 | March 31, 2020 | |:---|:---|:---|:---| | Total current assets | $3,157,718 | $3,222,975 | $2,868,007 | | Total assets | $4,914,296 | $5,030,628 | $4,837,575 | | Total current liabilities | $1,234,317 | $1,413,276 | $1,691,502 | | Total liabilities | $3,144,097 | $3,354,635 | $3,287,395 | | Total stockholders' equity | $1,770,199 | $1,675,993 | $1,550,180 | Unaudited Condensed Consolidated Statements of Operations This section details the company's revenues, expenses, and net income or loss over specific periods, reflecting operational performance Condensed Consolidated Statements of Operations Highlights (in thousands, except per share amounts) | Metric | Three Months Ended March 31, 2021 | Three Months Ended March 31, 2020 | |:---|:---|:---|\ | Net revenues | $1,257,195 | $930,240 | | Gross profit | $628,641 | $430,984 | | Income (loss) from operations | $106,890 | $(558,180) | | Net income (loss) | $77,752 | $(589,681) | | Basic net income (loss) per share | $0.17 | $(1.30) | | Diluted net income (loss) per share | $0.17 | $(1.30) | - Net revenues increased by 35.1% YoY, while the company swung from a significant operating loss to a substantial operating income7 Unaudited Condensed Consolidated Statements of Comprehensive Income (Loss) This section presents the company's total comprehensive income or loss, including net income and other comprehensive income items, for the reported periods Condensed Consolidated Statements of Comprehensive Income (Loss) (in thousands) | Metric | Three Months Ended March 31, 2021 | Three Months Ended March 31, 2020 | |:---|:---|:---|\ | Net income (loss) | $77,752 | $(589,681) | | Foreign currency translation adjustment | $3,318 | $(47,679) | | Unrealized gain on cash flow hedges, net of tax | $8,798 | $32,545 | | Loss on intra-entity foreign currency transactions | $(2,515) | $(4,354) | | Total other comprehensive income (loss) | $9,601 | $(19,488) | | Comprehensive income (loss) | $87,353 | $(609,169) | - The company reported a comprehensive income of $87.353 million for Q1 2021, a significant improvement from a comprehensive loss of $609.169 million in Q1 2020, primarily driven by the turnaround in net income and positive foreign currency translation adjustments10 Unaudited Condensed Consolidated Statements of Stockholders' Equity This section outlines changes in the company's equity accounts, including retained earnings and accumulated other comprehensive income or loss, over time Condensed Consolidated Statements of Stockholders' Equity Highlights (in thousands) | Metric | Balance as of Dec 31, 2020 | Balance as of March 31, 2021 | |:---|:---|:---|\ | Total Stockholders' Equity | $1,675,993 | $1,770,199 | | Retained Earnings | $673,855 | $747,231 | | Accumulated Other Comprehensive Loss | $(59,185) | $(49,584) | - Total stockholders' equity increased by $94.206 million from December 31, 2020, to March 31, 2021, primarily due to comprehensive income of $87.353 million13 Unaudited Condensed Consolidated Statements of Cash Flows This section details the company's cash inflows and outflows from operating, investing, and financing activities, providing insight into liquidity Condensed Consolidated Statements of Cash Flows Highlights (in thousands) | Metric | Three Months Ended March 31, 2021 | Three Months Ended March 31, 2020 | |:---|:---|:---|\ | Net cash provided by (used in) operating activities | $(150,588) | $(366,712) | | Net cash used in investing activities | $(7,904) | $(68,841) | | Net cash provided by (used in) financing activities | $(3,443) | $598,952 | | Net increase (decrease) in cash, cash equivalents and restricted cash | $(168,835) | $172,160 | | Cash, cash equivalents and restricted cash End of period | $1,359,680 | $968,168 | - Cash flows used in operating activities significantly decreased from $(366.7) million in Q1 2020 to $(150.6) million in Q1 2021, reflecting improved operational performance, while net cash used in investing activities also decreased substantially16 Notes to the Unaudited Condensed Consolidated Financial Statements This section provides detailed explanations and disclosures supporting the unaudited condensed consolidated financial statements NOTE 1. DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION This note describes the company's business operations, segment reporting changes, and the basis for preparing its condensed consolidated financial statements - Under Armour, Inc. develops, markets, and distributes branded athletic performance apparel, footwear, and accessories globally, along with digital health and fitness apps19 - Effective Q1 2021, the 'Connected Fitness' segment is no longer reported discretely due to the sale of MyFitnessPal and winding down of Endomondo in December 2020, with operating results of the remaining MapMyFitness (MMR) platforms now included in the 'Corporate Other' segment21 - The preparation of financial statements involves significant management estimates and judgments, which are increasingly impacted by the evolving COVID-19 pandemic, leading to uncertainty in future financial results22 NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES This note outlines the key accounting policies used in preparing the financial statements, including revenue recognition, cash, and investments Cash, Cash Equivalents and Restricted Cash (in thousands) | Metric | March 31, 2021 | December 31, 2020 | March 31, 2020 | |:---|:---|:---|:---|\ | Cash and cash equivalents | $1,348,737 | $1,517,361 | $959,318 | | Restricted cash | $10,943 | $11,154 | $8,850 | | Total Cash, cash equivalents and restricted cash | $1,359,680 | $1,528,515 | $968,168 | - The Company's revenue recognition policy follows ASC 606, recognizing revenue when performance obligations are satisfied, with specific considerations for wholesale, direct-to-consumer, gift cards, licensing, and digital subscriptions30 Customer Refund Liability and Associated Inventory (in thousands) | Metric | March 31, 2021 | December 31, 2020 | March 31, 2020 | |:---|:---|:---|:---|\ | Customer refund liability | $191,979 | $203,399 | $208,172 | | Inventory associated with the reserves | $54,540 | $57,867 | $63,339 | - Contract liabilities, primarily from advance payments for digital subscriptions and royalties, decreased from $26.7 million as of December 31, 2020, to $25.5 million as of March 31, 202133 - The Company holds equity method investments in Dome Corporation (Japan) and UA Sports (Thailand) Co., Ltd., recognizing its allocable share of their net income/loss35 NOTE 3. RESTRUCTURING AND RELATED IMPAIRMENT CHARGES This note details the company's restructuring plan, including estimated costs, charges incurred, and the financial impact of impairment activities - The Company's 2020 restructuring plan, approved in Fiscal 2020, aims to rebalance the cost base for improved profitability and cash flow, with estimated costs ranging from $550 million to $600 million3739 Restructuring and Impairment Charges (in thousands) | Category | Three Months Ended March 31, 2021 | Three Months Ended March 31, 2020 | |:---|:---|:---|\ | Total costs recorded in restructuring and impairment | $7,113 | $301,089 | | Total restructuring and impairment charges | $7,113 | $301,089 | | Estimated Remaining to be Incurred | $120,160 | N/A | | Total to be Incurred under plan | $600,000 | N/A | - As of March 31, 2021, $479.8 million of charges under the 2020 restructuring plan have been recorded to date, with $7.1 million incurred in Q1 2021, significantly lower than $301.1 million in Q1 202039 NOTE 4. LEASES This note provides information on the company's lease arrangements, including operating lease costs, cash flows, and the maturity schedule of lease liabilities - The Company accounts for operating leases by recognizing right-of-use (ROU) assets and lease liabilities on the balance sheet, based on the present value of future minimum lease payments45 Operating and Variable Lease Costs (in thousands) | Metric | Three Months Ended March 31, 2021 | Three Months Ended March 31, 2020 | |:---|:---|:---|\ | Operating lease costs | $34,935 | $37,872 | | Variable lease costs | $2,920 | $1,986 | Supplemental Cash Flow Information (in thousands) | Metric | Three Months Ended March 31, 2021 | Three Months Ended March 31, 2020 | |:---|:---|:---|\ | Operating cash outflows from operating leases | $45,909 | $36,547 | | Leased assets obtained in exchange for new operating lease liabilities | $4,074 | $72,963 | Maturity of Lease Liabilities as of March 31, 2021 (in thousands) | Year | Total Lease Payments | |:---|:---|\ | 2021 | $150,290 | | 2022 | $163,805 | | 2023 | $143,554 | | 2024 | $124,776 | | 2025 | $96,576 | | 2026 and thereafter | $467,029 | | Total lease payments | $1,146,030 | | Less: Interest | $183,820 | | Total present value of lease liabilities | $962,210 | NOTE 5. CREDIT FACILITY AND OTHER LONG TERM DEBT This note details the company's credit facilities, convertible senior notes, and other long-term debt, including terms, outstanding amounts, and interest expense - The Company's revolving credit facility was amended in May 2020, reducing commitments from $1.25 billion to $1.1 billion, with no outstanding amounts as of March 31, 2021, compared to $600.0 million outstanding in Q1 202053 - The credit agreement includes a 'covenant suspension period' through June 30, 2022, during which interest coverage and leverage covenants are suspended, replaced by a minimum liquidity covenant of $550.0 million until December 31, 2021, which the Company was in compliance with as of March 31, 20215354 - In May 2020, the Company issued $500.0 million aggregate principal amount of 1.50% Convertible Senior Notes due 2024, with net proceeds of $488.8 million used to repay revolving credit facility debt and pay capped call transaction costs55 Convertible Senior Notes Components (in thousands) | Metric | March 31, 2021 | December 31, 2020 | |:---|:---|:---|\ | Principal | $500,000 | $500,000 | | Net carrying amount (liability component) | $418,300 | $412,468 | | Equity component, net of issuance costs | $71,646 | $88,672 | Convertible Senior Notes Interest Expense (in thousands) | Metric | Three Months Ended March 31, 2021 | |:---|:---|\ | Coupon interest | $1,875 | | Non-cash amortization of debt discount | $5,210 | | Amortization of deferred financing costs | $622 | | Total Convertible senior notes interest expense | $7,707 | - Interest expense, net, increased to $14.1 million in Q1 2021 from $6.0 million in Q1 2020, primarily due to the interest associated with the 1.50% Convertible Senior Notes62 NOTE 6. COMMITMENTS AND CONTINGENCIES This note discloses the company's legal proceedings, regulatory investigations, and other commitments and contingencies that may impact its financial position - The Company is involved in ongoing securities litigation (Consolidated Securities Action) alleging material misstatements and omissions, with a third amended complaint filed in October 2020, and intends to vigorously defend the lawsuit647071 - Multiple state and federal court derivative complaints have been filed against current and former executives and directors, alleging breach of fiduciary duty, unjust enrichment, and corporate waste, among other claims, which the Company believes are without merit72747576 - On May 3, 2021, the Company settled with the SEC regarding an investigation into 'pull forward' sales, agreeing to pay a $9.0 million civil monetary penalty without admitting or denying findings, with the SEC Staff confirming no enforcement action against management76 - The U.S. Department of Justice (DOJ) also had an investigation into similar matters, but the Company has not received requests from the DOJ since Q2 2020 and does not anticipate additional engagement76 NOTE 7. FAIR VALUE MEASUREMENTS This note explains the company's fair value measurements for financial assets and liabilities, categorized by input levels used in valuation techniques - The Company categorizes fair value measurements into Level 1 (quoted prices in active markets), Level 2 (observable inputs other than quoted prices), and Level 3 (unobservable inputs)79 Financial Assets and Liabilities Measured at Fair Value (in thousands) | Instrument | March 31, 2021 (Level 2) | December 31, 2020 (Level 2) | March 31, 2020 (Level 2) | |:---|:---|:---|:---|\ | Derivative foreign currency contracts | $(13,173) | $(22,122) | $35,971 | | TOLI policies held by the Rabbi Trust | $8,001 | $7,697 | $5,471 | | Deferred Compensation Plan obligations | $(14,641) | $(14,314) | $(10,443) | - The fair value of the Company's Convertible Senior Notes was $982.9 million as of March 31, 2021, and its Senior Notes was $602.2 million, both estimated using Level 2 inputs80 NOTE 8. RISK MANAGEMENT AND DERIVATIVES This note describes the company's use of derivative instruments to manage market risks from foreign currency and interest rate fluctuations - The Company uses derivative instruments, primarily foreign currency contracts, to manage global market risks from foreign currency and interest rate fluctuations, not for speculative purposes8182 Fair Values of Derivative Instruments (in thousands) | Classification | March 31, 2021 | December 31, 2020 | March 31, 2020 | |:---|:---|:---|:---|\ | Total derivative assets designated as hedging instruments | $2,486 | $0 | $39,878 | | Total derivative liabilities designated as hedging instruments | $16,352 | $24,070 | $789 | | Total derivative assets not designated as hedging instruments | $5,114 | $2,384 | $8,582 | | Total derivative liabilities not designated as hedging instruments | $1,087 | $6,464 | $1,740 | - For cash flow hedges, changes in fair value are reported in other comprehensive income (loss) and reclassified to current earnings when the hedged transaction affects earnings, with the aggregate notional value of outstanding cash flow hedges being $688.9 million as of March 31, 202189 - Undesignated derivative instruments, primarily foreign exchange forward contracts, are recorded at fair value with changes recognized in other expense, net, and the total notional value of outstanding undesignated derivatives was $317.7 million as of March 31, 202191 NOTE 9. PROVISION FOR INCOME TAXES This note details the company's income tax provision, effective tax rates, and the impact of valuation allowances on deferred tax assets - The effective tax rate for Q1 2021 was 11.5%, a significant change from (3.8)% in Q1 2020, primarily due to the United States being considered a loss jurisdiction and the non-recurring recording of valuation allowances on certain deferred tax assets in the U.S. and China in Q1 202094 - The Company continues to maintain valuation allowances on its U.S. federal and most U.S. state deferred tax assets, as well as select foreign deferred tax assets, due to the weight of negative evidence regarding their realizability95 NOTE 10. EARNINGS PER SHARE This note presents the calculation of basic and diluted earnings per share, reflecting the company's profitability on a per-share basis Earnings Per Share (in thousands, except per share amounts) | Metric | Three Months Ended March 31, 2021 | Three Months Ended March 31, 2020 | |:---|:---|:---|\ | Net income (loss) | $77,752 | $(589,681) | | Weighted average common shares outstanding (Basic) | 456,014 | 452,871 | | Weighted average common shares and dilutive securities outstanding (Diluted) | 459,226 | 452,871 | | Basic net income (loss) per share | $0.17 | $(1.30) | | Diluted net income (loss) per share | $0.17 | $(1.30) | - Diluted EPS improved significantly to $0.17 in Q1 2021 from $(1.30) in Q1 2020, with potentially dilutive securities excluded from Q1 2020 EPS calculation as their effect would have been anti-dilutive due to the net loss position96 NOTE 11. SEGMENT DATA AND DISAGGREGATED REVENUE This note provides financial information by operating segment and disaggregated revenue by product category and distribution channel - The Company's operating segments are based on geographic regions: North America, EMEA, Asia-Pacific, and Latin America, with the 'Connected Fitness' segment discontinued and remaining operations (MMR) moved to 'Corporate Other' in Q1 202197 Net Revenues by Segment (in thousands) | Segment | Three Months Ended March 31, 2021 | Three Months Ended March 31, 2020 | |:---|:---|:---|\ | North America | $805,727 | $608,980 | | EMEA | $193,883 | $137,904 | | Asia-Pacific | $210,220 | $95,686 | | Latin America | $48,311 | $53,088 | | Corporate Other | $(946) | $34,582 | | Total net revenues | $1,257,195 | $930,240 | Operating Income (Loss) by Segment (in thousands) | Segment | Three Months Ended March 31, 2021 | Three Months Ended March 31, 2020 | |:---|:---|:---|\ | North America | $210,562 | $(3,773) | | EMEA | $26,686 | $3,704 | | Asia-Pacific | $46,513 | $(36,841) | | Latin America | $1,457 | $(48,184) | | Corporate Other | $(178,328) | $(473,086) | | Total operating income (loss) | $106,890 | $(558,180) | Net Revenues by Product Category (in thousands) | Product Category | Three Months Ended March 31, 2021 | Three Months Ended March 31, 2020 | |:---|:---|:---|\ | Apparel | $810,041 | $598,287 | | Footwear | $309,047 | $209,688 | | Accessories | $117,396 | $67,748 | | License revenues | $21,657 | $19,935 | | Total net revenues | $1,257,195 | $930,240 | Net Revenues by Distribution Channel (in thousands) | Distribution Channel | Three Months Ended March 31, 2021 | Three Months Ended March 31, 2020 | |:---|:---|:---|\ | Wholesale | $799,587 | $591,772 | | Direct to Consumer | $436,897 | $283,951 | | License revenues | $21,657 | $19,935 | | Total net revenues | $1,257,195 | $930,240 | ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS This section provides management's perspective on the Company's financial condition and results of operations for the three months ended March 31, 2021, compared to the same period in 2020, covering overall performance, strategic initiatives, and detailed financial analysis FORWARD-LOOKING STATEMENTS This section highlights the inherent uncertainties and risks associated with forward-looking statements regarding the company's future performance and strategies - The report contains forward-looking statements regarding future financial condition, growth strategies, COVID-19 impact, operating expense reductions, product development, marketing, and investment benefits, which are subject to risks and uncertainties106 - Key risk factors include the ongoing impact of the COVID-19 pandemic, changes in economic conditions, increased competition, fluctuations in raw material costs, customer financial health, and the ability to execute long-term strategies and manage global operations106 OVERVIEW This section provides a high-level summary of the company's business, strategic focus, and key operational achievements during the quarter - Under Armour is a leading developer, marketer, and distributor of branded athletic performance apparel, footwear, and accessories, with a digital strategy focused on consumer engagement108 - In Q1 Fiscal 2021, the Company achieved better-than-expected wholesale and direct-to-consumer sales, driven by strong demand in North America, Asia-Pacific, and EMEA108 - Strategic focus includes driving premium brand-right growth, improving profitability, reducing promotional activities, constraining supply, exiting undifferentiated retail, and managing off-price sales108 Quarterly Results This section presents a summary of the company's key financial performance metrics and their year-over-year changes for the quarter Q1 Fiscal 2021 Financial Highlights (YoY Change) | Metric | Change | |:---|:---|\ | Total net revenues | +35.1% | | Wholesale revenue | +35.1% | | Direct-to-consumer revenue | +53.9% | | Apparel revenue | +35.4% | | Footwear revenue | +47.4% | | Accessories revenue | +73.3% | | North America revenue | +32.3% | | EMEA revenue | +40.6% | | Asia-Pacific revenue | +119.7% | | Latin-America revenue | -9.0% | | Corporate Other revenues | -103% | | Gross margin | +370 bps to 50.0% | | Selling, general and administrative expense | -6.9% | | Restructuring and impairment charges | -98.4% to $7.1 million | COVID-19 Update This section details the ongoing impact of the COVID-19 pandemic on the company's operations, retail closures, and supply chain - The COVID-19 pandemic continues to cause disruption and volatility, with retail store closures persisting in certain locations, particularly in EMEA where approximately one-third of stores were closed as of March 31, 2021110111 - North America experienced higher-than-expected sales in Q1 2021 due to fewer COVID-19 restrictions, contrasting with ongoing volatility and potential supply chain disruptions globally111 - The Company recognized $1.5 million in incentives under global legislation, including the CARES Act, in Q1 2021, recorded as a reduction in selling, general and administrative expenses112 Segment Presentation and Marketing This section explains changes in the company's segment reporting structure, specifically the discontinuation of the Connected Fitness segment - Effective January 1, 2021, the Connected Fitness segment is no longer reported discretely; its remaining business (MMR platforms) is now included in Corporate Other, along with unallocated general and administrative expenses and restructuring charges113 Fiscal Year End Change This section announces the company's decision to change its fiscal year end to align with its business cycle - The Board of Directors authorized a change in the fiscal year end from December 31 to March 31, effective for the fiscal year beginning April 1, 2022, to align with the business cycle114 2020 Restructuring This section outlines the details and financial impact of the company's 2020 restructuring plan, including estimated costs and charges incurred - The 2020 restructuring plan, approved in Fiscal 2020, targets $550 million to $600 million in costs, comprising $219 million in cash charges (facility/lease, severance, contract termination) and $381 million in non-cash charges (impairment of NYC flagship store, intangibles)114116 - The Company recorded $7.1 million in restructuring and impairment charges in Q1 2021, a significant decrease from $301.1 million in Q1 2020, which included substantial goodwill and long-lived asset impairment charges116 GENERAL This section defines key components of the company's financial statements, including net revenues, cost of goods sold, and selling, general and administrative expenses - Net revenues include net sales (apparel, footwear, accessories), license revenues, and digital subscriptions/advertising, while cost of goods sold includes product costs, freight, duties, royalties, and inventory write-downs117 - Selling, general and administrative expenses are categorized into marketing and other costs, with marketing including sports/brand marketing, media, and retail presentation, and outbound handling costs included in SG&A, not COGS117 - Other income (expense), net, primarily consists of unrealized/realized gains/losses on foreign currency derivatives and transactions, and rent expense for the New York City flagship store117 RESULTS OF OPERATIONS This section provides a summary of the company's key financial metrics as a percentage of net revenues, illustrating operational efficiency Key Components of Results of Operations (as a percentage of net revenues) | Metric | Three Months Ended March 31, 2021 | Three Months Ended March 31, 2020 | |:---|:---|:---|\ | Net revenues | 100.0% | 100.0% | | Cost of goods sold | 50.0% | 53.7% | | Gross profit | 50.0% | 46.3% | | Selling, general and administrative expenses | 40.9% | 59.4% | | Restructuring and impairment charges | 0.6% | 46.9% | | Income (loss) from operations | 8.5% | (60.0)% | | Net income (loss) | 6.2% | (63.4)% | CONSOLIDATED RESULTS OF OPERATIONS This section analyzes the company's overall financial performance, including revenue growth, gross margin, operating expenses, and net income - Total net revenues increased 35.1% to $1.26 billion in Q1 2021, driven by increased unit sales across all product categories and timing shifts from Q4 2020 to Q1 2021 due to COVID-19121123 - Gross margin increased 370 basis points to 50.0%, primarily due to pricing improvements (lower promotional activity), supply chain benefits, and favorable channel/regional mix, partially offset by the MyFitnessPal sale123 - Selling, general and administrative expenses decreased 6.9% to $514.6 million, mainly due to reduced marketing costs (lower rights fees) and other costs (lower legal expense, depreciation), despite higher incentive compensation123 - Income from operations significantly improved by $665.1 million to $106.9 million, primarily due to increased revenues and substantially lower restructuring and impairment charges compared to the prior year123 - Net interest expense increased by $8.2 million to $14.1 million, mainly due to interest on the 1.50% Convertible Senior Notes issued in May 2020123 SEGMENT RESULTS OF OPERATIONS This section provides a detailed analysis of financial performance across the company's geographic operating segments - North America net revenues increased 32.3% to $805.7 million, driven by increased wholesale and direct-to-consumer unit sales and timing shifts, with operating income swinging from a loss of $3.8 million to an income of $210.6 million due to revenue growth, gross margin improvements, and absence of prior year impairment charges127129130 - EMEA net revenues increased 40.6% to $193.9 million, primarily from wholesale channels and e-commerce growth, despite retail store closures, and operating income increased significantly to $26.7 million from $3.7 million127129130 - Asia-Pacific net revenues surged 119.7% to $210.2 million, driven by increased wholesale unit sales and e-commerce/retail store growth, with operating income improving from a loss of $36.8 million to an income of $46.5 million, benefiting from revenue growth and absence of prior year impairment charges127129130 - Latin America net revenues decreased 9.0% to $48.3 million, mainly due to decreased wholesale unit sales, partially offset by e-commerce growth, with operating income improving from a loss of $48.2 million to an income of $1.5 million, primarily due to the absence of prior year goodwill and long-lived asset impairment charges127129130 - Corporate Other operating loss decreased by $294.8 million to $178.3 million, primarily due to the non-recurrence of $301.1 million in restructuring and impairment charges and higher legal expenses from Q1 2020, partially offset by higher incentive compensation131 FINANCIAL POSITIONS, CAPITAL RESOURCES AND LIQUIDITY This section discusses the company's financial health, cash requirements, funding sources, and liquidity position, including debt and credit facilities - The Company's cash requirements are primarily for working capital and capital expenditures, funded by operating cash flows, cash on hand, and credit facilities, with cash and cash equivalents totaling $1.3 billion as of March 31, 2021132 - Cash flows used in operating activities decreased by $216.1 million YoY, primarily due to increased net income and favorable changes in working capital, including a $355.8 million change in other non-current assets and a $108.9 million increase from inventories135 - Cash flows used in investing activities decreased by $60.9 million YoY, driven by reduced capital expenditures ($23.0 million) and the absence of acquisition-related activity ($37.3 million) from the prior year136 - Cash flows provided by financing activities decreased by $602.4 million YoY, primarily due to the absence of $600.0 million in net borrowings under the Revolver in Q1 2020137 - The Company's amended revolving credit facility has $1.1 billion in commitments, with no amounts outstanding as of March 31, 2021, and includes a minimum liquidity covenant of $550.0 million through December 31, 2021, which the Company expects to comply with138139 - The 1.50% Convertible Senior Notes ($500.0 million principal) and 3.250% Senior Notes ($600.0 million principal) are key components of the Company's long-term debt, with specific conversion, redemption, and covenant terms141142 CONTRACTUAL COMMITMENTS AND CONTINGENCIES This section confirms no significant changes to contractual obligations since the last annual report, apart from normal business course adjustments - There were no significant changes to contractual obligations reported in the Annual Report on Form 10-K for Fiscal 2020, other than borrowings and repayments disclosed in the Capital Resources section and normal course of business changes143 CRITICAL ACCOUNTING POLICIES AND ESTIMATES This section highlights the significant management estimates and assumptions used in preparing the financial statements and any recent accounting standard adoptions - The Company's financial statements are prepared under U.S. GAAP, requiring significant management estimates and assumptions that are inherently uncertain, with no significant changes to critical accounting policies occurring in Q1 2021, other than the adoption of recent accounting standards144145 Recently Issued Accounting Standards This section discusses the company's evaluation of recently issued accounting standards and their potential impact on future financial statements - The Company is evaluating the impact of recently issued accounting standards, including ASU 2020-06 (simplifying convertible instrument accounting) and Topic 848 (reference rate reform), on its financial statements36146 ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK This section states that there have been no significant changes to the Company's market risk exposure since December 31, 2020, referring readers to the Annual Report on Form 10-K for a detailed discussion - No significant changes to market risk have occurred since December 31, 2020148 ITEM 4. CONTROLS AND PROCEDURES This section details management's evaluation of the effectiveness of the Company's disclosure controls and procedures and reports on any changes in internal controls over financial reporting Evaluation of Disclosure Controls and Procedures This section reports management's conclusion on the effectiveness of the company's disclosure controls and procedures - The Chief Executive Officer and Chief Financial Officer concluded that the Company's disclosure controls and procedures were effective as of March 31, 2021, ensuring timely and accurate reporting of information149 Changes in Internal Controls This section states that there were no material changes to the company's internal control over financial reporting during the quarter - There have been no material changes to the Company's internal control over financial reporting during the most recent fiscal quarter, and the Company continues to monitor and assess COVID-19 impacts on controls150 PART II. OTHER INFORMATION This section includes legal proceedings, risk factors, exhibits, and signatures, providing additional disclosures beyond the financial statements ITEM 1. LEGAL PROCEEDINGS This section refers to detailed disclosures on the company's legal proceedings found in the notes to the financial statements - Information on legal proceedings is incorporated by reference from Note 6 to the unaudited condensed consolidated financial statements152 ITEM 1A. RISK FACTORS This section directs readers to the annual report for a comprehensive discussion of factors that could adversely affect the company's business - Readers should refer to the 'Risk Factors' section in the Annual Report on Form 10-K for Fiscal 2020 for a discussion of risks and uncertainties153 Item 6. Exhibits This section lists all exhibits filed with the report, including certifications and XBRL documents - The report includes various exhibits such as Section 302 and 906 certifications from the CEO and CFO, and XBRL taxonomy extension documents154 SIGNATURES This section contains the official certification signature for the report by the company's Chief Financial Officer - The report is signed by David E. Bergman, Chief Financial Officer of Under Armour, Inc., on May 7, 2021156
Under Armour(UA) - 2021 Q4 - Annual Report