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~~Our limited operating experience and limited brand recognition in new markets may limit our expansion strategy and cause our business and growth to suffer.~~

A significant element of our future growth strategy depends on our expansion efforts outside of North America. During the year ended December 31, 2019, 69% of our net revenues were earned in our North America segment. We have limited experience with regulatory environments and market practices in certain regions outside of North America, and may face difficulties in expanding to and successfully operating in those markets. International expansion may place increased demands on our operational, managerial and administrative resources and may be more costly than we expect. In addition, in connection with expansion efforts outside of North America, we may face cultural and linguistic differences, differences in regulatory environments, labor practices and market practices and difficulties in keeping abreast of market, business and technical developments and customers’ tastes and preferences. We may also encounter difficulty expanding into new markets because of more limited brand recognition leading to delayed acceptance of our products. Failure to successfully grow our business outside North America would negatively impact our ability to achieve our near-term and long-term growth targets.

~~Our financial results and ability to grow our business may be negatively impacted by economic, regulatory and political risks beyond our control.~~

Substantially all of our manufacturers are located outside of the United States and an increasing amount of our net revenue is generated by sales in our international business. As a result, we are subject to risks associated with doing business abroad, including:

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•~~political or labor unrest, terrorism and economic instability resulting in the disruption of trade from foreign countries in which our products are manufactured;~~

•~~currency exchange fluctuations or requirements to transact in specific currencies;~~

•~~the imposition of new laws and regulations, including those relating to labor conditions, quality and safety standards, as well as rules and regulations regarding climate change;~~

•~~uncertainties and the ongoing effect of the United Kingdom’s withdraw from the European Union;~~

•actions of foreign or U.S. governmental authorities impacting trade and foreign investment, particularly during periods of heightened tension between U.S. and foreign governments, including the imposition of new import limitations, duties, anti-dumping penalties, trade restrictions or restrictions on the transfer of funds;

•~~reduced protection for intellectual property rights in some countries;~~

•~~disruptions or delays in shipments; and~~

•~~changes in local economic conditions in countries where our stores, customers, manufacturers and suppliers are located.~~

These risks could hamper our ability to sell products in international markets, negatively affect the ability of our manufacturers to produce or deliver our products or procure materials and increase our cost of doing business generally, any of which could have an adverse effect on our results of operations, cash flows and financial condition. In the event that one or more of these factors make it undesirable or impractical for us to conduct business in a particular country, our business could be adversely affected.

If we fail to successfully manage or realize expected results from ~~acquisitions and other~~ significant transactions or investments, or if we are required to recognize an impairment of our goodwill or other intangible assets, it may have an adverse effect on our results of operations and financial position.

From time to time, we may engage in acquisition opportunities we believe are complementary to our business and brand. Integrating ~~acquisitions~~acquired businesses can ~~also~~ require significant efforts and resources, which could divert management attention from more profitable business operations. From time to time we have also disposed of certain assets where we did not think our activities aligned to our operating model. If we fail to successfully integrate acquired businesses or effectively manage dispositions, we may not realize the financial benefits or other synergies we anticipated. In addition, in connection with our acquisitions, we may record goodwill or other ~~indefinite-lived~~ intangible assets. We have recognized goodwill impairment charges in the ~~past. If an acquired business does not produce results consistent with financial models used in our analysis of an acquisition, or if reporting units carrying~~past, and additional goodwill do not meet our current expectations of future growth rates or market factors outside of our control change significantly, then one or more of our reporting units or intangible assets might become impaired, whichimpairment charges could have an adverse effect on our results of operations and financial position. AsAdditionally, from time to time, we may invest in business infrastructure, new businesses and expansion of ~~December 31, 2019,~~existing businesses, such as the ~~fair~~expansion of our network of Brand and Factory House stores and our distribution facilities, implementing our global operating and financial reporting information technology system, supporting our digital strategy (including our e-commerce platform and loyalty programs), or supporting our corporate infrastructure (including the development of our new global headquarters located in the Baltimore Peninsula, an area of Baltimore previously referred to as Port Covington). These investments require substantial cash investments and management attention, and infrastructure investments may also divert funds from other potential business opportunities. We believe cost effective investments are essential to business growth and profitability. The failure of any significant investment to provide the returns or synergies we expect could adversely affect our financial results.

Climate change and an increased focus on sustainability issues, including those related to climate change, human rights and diversity, equity and inclusion, may have an adverse effect on our brand, sales of our products and our results of operations.

There are concerns that increased levels of greenhouse gases in the atmosphere have caused, and may continue to cause, increases in global temperatures, changes in weather patterns and an increase in the frequency and severity of natural disasters and extreme weather events. Climate change has the potential to impact our business in numerous ways. These concerns may impact consumer preferences and, if we fail to adapt accordingly, consumer demand for our product. The physical impacts of climate change, such as an increase in the frequency and severity of storms and flooding, may increase volatility in the supply chain, which could affect the availability, quality and cost of raw materials, and disruption to the production and distribution of our products. In addition, governmental authorities in various countries have proposed, and are likely to continue to propose, legislation and regulation to reduce or mitigate the impacts of climate change. Various countries and regions are following different approaches to the regulation of climate change, which could increase the complexity of, and potential cost related to complying with, such regulations. Any of the foregoing may require us to make additional investments. Failure to monitor, adapt, build resilience and develop solutions against the physical and transitional impacts from climate change may negatively impact our brand and reputation, sales of our products and our results of operations.

Certain customers, consumers, investors and other stakeholders are increasingly focusing on the sustainability and human rights practices of companies, including those related to climate change and diversity, equity and inclusion. If our sustainability and human rights practices do not meet such stakeholder expectations and standards, which continue to evolve, our brand and reputation could be negatively impacted. We have published, and may continue to publish, a sustainability report and other information describing our practices, targets and commitments on a variety of sustainability and human rights matters, including relating to our actions to address climate change, environmental targets and compliance, social and labor policies and practices, human capital management matters (including those relating to diversity, equity and inclusion) and the materials and manufacturing of our products. It is possible that stakeholders may not be satisfied with such disclosures, our sustainability and human rights practices, targets or commitments or the speed or success of their adoption. We may incur additional costs, face market and technological barriers, require additional resources or change investment decisions, which may require us to adjust or restate some or all of our targets and commitments. Any failure, or perceived failure, to meet stakeholder expectations or our targets or commitments could harm our reputation, negatively impact our employee retention or have a negative effect on our sales and results of operations.

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The costs and return on our investments for our sports marketing sponsorships may become more challenging and this could impact the value of ~~each~~our brand image.

A key element of our ~~reporting units substantially exceeded its carrying value,~~marketing strategy has been to create a link in the consumer market between our products and professional, collegiate and young athletes. We have developed licensing and sponsorship agreements with a variety of sports teams and athletes at the ~~exception~~collegiate and professional level to be their official supplier of performance apparel and footwear. We have also developed licensing agreements to be an official supplier of footwear and/or performance apparel to a variety of professional sports leagues and clubs. However, as competition in the performance apparel and footwear industry has increased, the costs associated with athlete sponsorships and official supplier licensing agreements, including the costs of obtaining and retaining these sponsorships and agreements, have varied and at times increased greatly. If we are unable to maintain our ~~Latin America reporting unit. While no events have occurred that indicated it was more likely than not that goodwill was impaired, an impairment~~current association with professional athletes, teams and leagues, or to do so at a reasonable cost, we could lose the on-field authenticity associated with our products, and we may be required to modify and substantially increase our marketing investments.

If we encounter problems with our distribution system, our ability to deliver our products to the market could be adversely affected.

We rely on a limited number of distribution facilities for our product distribution. Our distribution facilities utilize computer controlled and automated equipment, which means the operations are complicated and may be subject to a number of risks related to security or computer viruses or malware, the proper operation of software and hardware, power interruptions or other system failures. In addition, because many of our products are distributed from a limited number of locations, our operations could also be interrupted by severe weather conditions, floods, fires or other natural disasters in these locations, as well as labor or other operational difficulties or interruptions, including public health crises or disease epidemics. We maintain business interruption insurance, but it may not adequately protect us from the ~~future if~~adverse effects that could be caused by significant disruptions in our ~~current~~distribution facilities or from all types of events causing such disruptions. Significant disruptions could lead to loss of customers or an erosion of our brand image. In addition, our distribution capacity is dependent on the timely performance of services by third parties. This includes the shipping of product to and from our distribution facilities, as well as partnering with third-party distribution facilities in certain regions where we do not maintain our own facilities. From time to time, certain of our partners have experienced and may continue to experience disruptions to their operations, including cyber-related disruptions and disruptions related to the COVID-19 pandemic. If we or our partners encounter such problems, our results of operations, as well as our ability to meet customer expectations, manage inventory, complete sales and achieve objectives for operating efficiencies could be materially adversely affected.

We rely significantly on information technology and any failure, inadequacy or interruption of that technology could harm our ability to effectively operate our business.

We rely on our own and our vendors' information technology throughout our business operations, including to design, forecast and order product, manage and maintain our inventory and internal reports, manage sales and distribution, operate our e-commerce website and mobile applications, process transactions, manage retail operations and other key business activities. We also communicate electronically throughout the world with our employees and with third parties, such as customers, suppliers, vendors and consumers. Our operations are dependent on the reliable performance of these systems and technologies and their underlying technical infrastructure, which incorporate complex software. Any of these information systems could fail or experience a service interruption for a number of reasons, including computer viruses, ransomware or other malware, programming errors, hacking or other unlawful activities, disasters or a failure to properly maintain system redundancy or protect, repair, maintain or upgrade the systems. For example, in Fiscal 2021, a remote code execution vulnerability in Apache log4j was identified as affecting large amounts of systems worldwide, including ours. We have not experienced any material operational disruptions related to this ~~reporting unit are not met.~~event.

From time to time we have experienced, and may continue to experience, operational disruption due to attacks on our systems and those of our vendors. Although we maintain certain business continuity plans, there can be no assurance that our business continuity plans, or those of our vendors, will anticipate all material risks that may arise or will effectively resolve the issues in a timely manner or adequately protect us from the adverse effects that could be caused by significant disruptions in key information technology. The failure of these systems to operate effectively or to integrate with other systems, or a breach in security of these systems could cause delays in product fulfillment and reduced efficiency of our operations, lost sales, the exposure of sensitive business or personal information and damage to the reputation of our brand. Depending on the system and scope of disruption,

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in some instances a service interruption or shutdown could have a material adverse impact on our operating activities or results of operations. Remediation and repair of any failure, problem or breach of our key systems or known potential vulnerabilities could require significant capital investments, as well as divert resources and management attention from key projects or initiatives. While we have purchased cybersecurity insurance, there can be no assurance that the coverage would be adequate in relation to any incurred losses. Moreover, as cyber attacks increase in frequency and magnitude, we may be unable to obtain cybersecurity insurance in amounts and on terms we view as appropriate for our operations.

We also heavily rely on information systems to process financial and accounting information for financial reporting purposes. If we experience any significant disruption to our financial information systems that we are unable to mitigate, our ability to timely report our financial results could be impacted, which could negatively impact our stock price.

Our future success is substantially dependent on the continued service of our senior management and other key employees, and our continued ability to attract and retain highly talented new team members.

Our future success is substantially dependent on the continued service of our senior management, particularly Kevin Plank, our founder, Executive Chair and Brand Chief, Stephanie Linnartz, our President and Chief Executive Officer, other top executives and key employees who have substantial experience and expertise in our business, including product creation, innovation, sales, marketing, supply chain, informational technology, operational and other support personnel. The loss of the services of our senior management or other key employees could make it more difficult to successfully operate our business and achieve our business goals and could result in harm to key customer relationships, loss of key information, expertise or know-how and unanticipated recruitment and training costs. Changes in our senior management can also disrupt our business. The failure to successfully transition and assimilate key employees could adversely affect our results of operations.

In addition, to profitably grow our business and manage our operations, we will need to continue to attract, retain and motivate highly talented management and other employees with a range of skills, backgrounds and experiences. Competition for experienced and well-qualified employees in our industry is intense and we may not be successful in attracting and retaining such personnel. Additionally, changes to our current and future office environments, adoption of new work models and requirements about when or how often employees work on-site or remotely may fail to meet the expectations of our employees and present new challenges. As certain jobs and employers increasingly operate remotely, traditional geographic competition for talent may change in ways that cannot be fully predicted at this time. If we are unable to attract, retain and motivate management and other employees with the necessary skills, we may not be able to grow or successfully operate our business and achieve our long-term objectives. In addition, we have invested significant time and resources in building, maintaining and evolving our company culture and our values, which we believe to be critical to our future success. Failure to maintain and continue to evolve our culture could negatively affect our ability to attract, retain and motivate talented management and employees and to achieve our long-term objectives.

We may not fully realize the expected benefits of our restructuring plans or other operating or cost-saving initiatives, which may negatively impact our profitability.

Since 2017, we have executed three separate restructuring plans designed to more closely align our financial resources against the critical priorities of our business and rebalance our cost base to further improve future profitability and cash flow generation. We have also implemented several changes to our operating model and continue to refine our operating model in response to business and market conditions. We may not achieve the operational improvements and efficiencies that we targeted in our restructuring plans and operating model changes, which could adversely impact our results of operations and financial condition. Implementing any restructuring plan or operating model change presents significant potential risks including, among others, higher than anticipated implementation costs, management distraction from ongoing business activities, failure to maintain adequate controls and procedures while executing our restructuring plans and operating model changes, damage to our reputation and brand image and workforce attrition beyond planned reductions. If we fail to achieve targeted operating improvements and/or cost reductions, our profitability and results of operations could be negatively impacted, which may be dilutive to our earnings in the short term.

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Financial Risks

Our credit agreement contains financial covenants, and both our credit agreement and debt securities contain other restrictions on our actions, which could limit our operational flexibility or otherwise adversely affect our financial condition.

We have, from time to time, financed our liquidity needs in part from borrowings made under our credit facility and the issuance of debt securities. Our ~~debt securities~~Senior Notes limit our ability to, subject to certain significant exceptions, incur secured debt and engage in sale leaseback transactions. Our amended credit agreement contains negative covenants that, subject to significant exceptions limit our ability, among other things to incur additional indebtedness, make restricted payments, sell or dispose of assets, pledge assets as security, make investments, loans, advances, guarantees and acquisitions, undergo fundamental changes and enter into transactions with affiliates. In addition, we must maintain a certain leverage ratio and interest coverage ratio as defined in the amended credit agreement. Our ability to continue to borrow amounts under our amended credit agreement is limited by continued compliance with these financial covenants, and in the past we have amended our credit agreement to ~~increase these ratios in~~provide certain ~~quarterly~~relief from and revisions to our financial covenants for specified periods to provide us with sufficient access to liquidity during those periods. Failure to comply with these operating or financial covenants could result from, among other things, changes in our results of operations or general economic conditions. These covenants may restrict our ability to engage in transactions that would otherwise be in our best interests. Failure to comply with any of the covenants under the amended credit agreement or our ~~debt securities~~Senior Notes could result in a ~~default.~~ default, which could negatively impact our access to liquidity.

In addition, the amended credit agreement includes a cross default provision whereby an event of default under certain other debt obligations (including our debt securities) will be considered an

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event of default under the amended credit agreement. If an event of default occurs, the commitments of the lenders under the amended credit agreement may be terminated and the maturity of amounts owed may be accelerated. Our debt securities include a cross acceleration provision which provides that the acceleration of certain other debt obligations (including our credit agreement) will be considered an event of default under our debt securities and, subject to certain time and notice periods, give bondholders the right to accelerate our debt securities.

We may need to raise additional capital ~~required~~ to manage and grow our business, and we may not be able to raise capital on terms acceptable to us or at all.

~~Growing~~Managing and ~~operating~~growing our business will require significant cash outlays and capital expenditures and commitments. We have utilized cash on hand and cash generated from operations, accessed our credit facility and issued debt securities as sources of liquidity. IfFor example, during the first and second quarters of Fiscal 2020, our cash generated from operations was negatively impacted due to widespread temporary store closures as a result of the COVID-19 pandemic. As of March 31, 2023, our cash and cash equivalents totaled $712 million. However, if in future periods our cash on hand, ~~and~~ cash generated from operations and availability under our credit agreement are not sufficient to meet our cash requirements, we will need to seek additional capital, potentially through debt or equity financing, to fund our ~~growth.~~operations and future growth, and we may be unable to obtain debt or equity financing on favorable terms or at all. Our ability to access the credit and capital markets in the future as a source of liquidity, and the borrowing costs associated with such financing, are dependent upon market conditions and our credit rating and outlook. Our credit ratings have been downgraded ~~previously,~~in the past, and we cannot assure that we will be able to maintain our current ratings, which could increase our cost of borrowing in the future. In addition, equity financing may be on terms that are dilutive or potentially dilutive to our stockholders, and the prices at which new investors would be willing to purchase our securities may be lower than the current price per share of our common stock. The holders of new securities may also have rights, preferences or privileges which are senior to those of existing holders of common stock. If new sources of financing are required, but are insufficient or unavailable, we will be required to modify our growth and operating plans based on available funding, if any, which would harm our ability to grow our business.

In addition, the U.K. Financial Conduct Authority announced in 2017 that it intends to phase out LIBOR by the end of 2021. Our credit agreement permits us to borrow based on an adjusted LIBOR rate, plus an applicable margin. While the credit agreement provides for a mechanism for determining an alternative interest rate following this phase out, uncertainty regarding alternative rates may make borrowing under our credit agreement or refinancing our other indebtedness more expensive or difficult to achieve on terms we consider favorable.

Our operating results are subject to seasonal and quarterly variations in our net revenues and income from operations, which could adversely affect the price of our publicly traded common stock.

We have experienced, and expect to continue to experience, seasonal and quarterly variations in our net revenues and income or loss from operations. These variations are primarily related to the mix of our products sold during the fall selling season, including our higher price cold weather products, along with a larger proportion of higher margin direct to consumer sales. Our quarterly results may also vary based on the timing of customer orders. The majority of our net revenues ~~were~~are historically generated during the last two quarters ~~in each~~ of ~~2019, 2018 and 2017, respectively.~~

the calendar year. Our quarterly results of operations may also fluctuate significantly as a result of a variety of other factors, including ~~among other things,~~the timing of our customer orders, our ability to timely delivery, the timing of marketing expenses and changes in our product mix. Variations in weather conditions may also have an adverse effect on our quarterly results of operations. For example, warmer than normal weather conditions throughout the fall or winter may reduce sales of our COLDGEAR® line, leaving us with excess inventory and operating results below our expectations.

As a result of these seasonal and quarterly fluctuations, we

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believe that comparisons of our operating results between different quarters within a single year are not necessarily meaningful and that these comparisons cannot be relied upon as indicators of our future performance. Any seasonal or quarterly fluctuations that we report in the future may not match the expectations of market analysts and investors. This could cause the price of our publicly traded stock to fluctuate significantly.

Our results of operations are affected by the performance of our equity investments, over which we do not exercise control.

We maintain certain minority investments, and may in the future invest in additional minority investments, which we account for under the equity method, and are required to recognize our allocable share of its net income or loss in our Consolidated Financial Statements. Our results of operations are affected by the performance of these businesses, over which we do not exercise control, and our net income or loss may be negatively impacted by losses realized by these investments. For example, we have previously recognized losses related to our Japanese licensee's business. We are also required to regularly review our investments for impairment, and an impairment charge may result from the occurrence of adverse events or management decisions that impact the fair value or estimated future cash flows to be generated from our investments. In addition, to the extent our Japanese licensee continues to experience challenges in the performance of its business, we may not continue to realize the license revenues from our Japanese licensee in line with its past results, which could negatively impact our net revenues and results of operations. Furthermore, based on its financial performance, our ability to recover our investment in the long term may be limited.

Our financial results could be adversely impacted by currency exchange rate fluctuations.

WeDuring Fiscal 2023, we generated approximately ~~28%~~34% of our consolidated net revenues outside the United States. As our international business grows, our results of operations could be adversely impacted by changes in foreign currency exchange rates. Revenues and certain expenses in markets outside of the United States are recognized in local foreign currencies, and we are exposed to potential gains or losses from the translation of those amounts into U.S. dollars for consolidation into our financial statements. These amounts can be material. Similarly, we are exposed to gains and losses resulting from currency exchange rate fluctuations on transactions generated by our foreign subsidiaries in currencies other than

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their local currencies. In addition, the business of our independent manufacturers may also be disrupted by currency exchange rate fluctuations by making their purchases of raw materials more expensive and more difficult to finance. ~~As a result,~~From time to time, our results of operations have been, and may continue to be, adversely impacted by foreign currency exchange rate ~~fluctuations may adversely impact our results of operations.~~

~~The value of our brand and sales of our products could be diminished if we are associated with negative publicity.~~

Our business could be adversely impacted if negative publicity regarding our brand, our company or our business partners diminishes the appeal of our brand to consumers. For example, while we require our suppliers, manufacturers and licensees of our products to operate their businesses in compliance with applicable laws and regulations as well as the social and other standards and policies we impose on them, including our code of conduct, we do not control their practices. A violation, or alleged violation of our policies, labor laws or other laws could interrupt or otherwise disrupt our sourcing or damage our brand image. Negative publicity regarding production methods, alleged practices or workplace or related conditions of any of our suppliers, manufacturers or licensees could adversely affect our reputation and sales and force us to locate alternative suppliers, manufacturers or licensees.

fluctuations. In addition, we have ~~sponsorship contracts with~~previously designated cash flow hedges against certain forecasted transactions. If we determine that such a ~~variety of athletes~~transaction is no longer probable to occur in the time period we expected, we are required to de-designate the hedging relationship and ~~feature those athletes~~immediately recognize the derivative instrument gain or loss in our ~~advertising~~earnings. From time to time, global macroeconomic factors, such as the ongoing impacts of COVID-19, have caused and ~~marketing efforts,~~may continue to cause uncertainty in forecasted cash flows, which has resulted and ~~many athletes and teams use our products, including those teams or leagues for which we are an official supplier. Actions taken by athletes, teams or leagues associated with our products could harm~~may in the reputations of those athletes, teams or leagues. These and other types of negative publicity, especially through social media which potentially accelerates and increases the scope of negative publicity, could negatively impact our brand image andfuture result in ~~diminished loyalty to our brand, regardless~~the de-designation of ~~whether such claims are accurate. This could have a negative effect on our sales and results of operations.~~certain hedged transactions.

~~Sponsorships~~

Legal, Regulatory and ~~designations as an official supplier may become more expensive and this could impact the value of our brand image.~~Compliance Risks

A key element of our marketing strategy has been to create a link in the consumer market between our products and professional and collegiate athletes. We have developed licensing agreements to be the official supplier of performance apparel and footwearOur business is subject to a ~~variety~~wide array of ~~sports teams~~laws and ~~leagues at the collegiate~~regulations, and professional level and sponsorship agreements with athletes. However, as competition in the performance apparel and footwear industry has increased, the costs associated with athlete sponsorships and official supplier licensing agreements have increased, including the costs associated with obtaining and retaining these sponsorships and agreements. If we are unable to maintain our current association with professional and collegiate athletes, teams and leagues, or to do so at a reasonable cost, we could lose the on-field authenticity associated with our products, and we may be required to modify and substantially increase our marketing investments. As a result, our brand image, net revenues, expenses and profitability could be materially adversely affected.

~~Our~~ failure to comply with ~~trade and other regulations~~these requirements could lead to investigations or actions by government regulators, increased expense or reputational damage.

Our business is subject to a wide array of laws and ~~negative publicity.~~

~~The~~regulations, including those addressing consumer protection, safety, labeling, distribution, importation, sustainability and environmental matters, labor and human rights matters, the marketing and sale of our products, data privacy and other matters. These requirements are ~~subject to extensive regulation~~enforced by various federal agencies, including the Federal Trade Commission, Consumer Product Safety Commission and state attorneys general in the ~~U.S.,~~United States, as well as by various other federal, state, provincial, local and international regulatory authorities in the locations in which our products are distributed or sold. If we fail to comply with ~~those~~these regulations, we could become subject to significant penalties or claims or be required to stop selling or otherwise recall products, which could negatively impact our results of operations and disrupt our ability to conduct our business, as well as damage our brand image with consumers. In addition, the adoption of new legislation, regulations or industry standards, including related to data privacy, sustainability and climate change, or changes in the interpretation of existing regulations may result in significant unanticipated compliance costs or

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discontinuation of product sales and may impair the marketing of our products, resulting in significant loss of net revenues.

Our international operations are also subject to compliance with the U.S. Foreign Corrupt Practices Act, or FCPA, and U.S. sanctions laws, as well as other anti-bribery and sanctions laws ~~applicable to our operations.~~of foreign jurisdictions where we conduct business. Although we have policies and procedures to address compliance with the FCPA and similar laws and sanctions requirements, there can be no assurance that all of our employees, contractors, agents and other partners will not take actions in violations of our ~~policies.~~policies or that our procedures will effectively mitigate against such risks. Any such violation could subject us to sanctions or other penalties that could negatively affect our reputation, business and operating results.

~~Table~~We must also comply with increasingly complex and evolving regulatory standards throughout the world enacted to protect personal information and other data, including the General Data Protection Regulation, the ePrivacy Directive, the California Consumer Privacy Act of ~~Contents~~

~~If we encounter problems with our distribution system,~~2018, the California Privacy Rights Act, state privacy laws in Virginia, Utah, Connecticut and Colorado and the Personal Information Protection Law in China. These laws and related regulations impact our ability to ~~deliver~~engage with our ~~products to the market could be adversely affected.~~

~~We rely on a limited number of distribution facilities for our product distribution. Our distribution facilities utilize computer controlled~~consumers, and automated equipment, which means the operations are complicated and may be subject to a number of risks related to security or computer viruses or malware, the proper operation of software and hardware, power interruptions or other system failures. In addition, because many of our products are distributed from a limited number of locations, our operations could also be interrupted by severe weather conditions, floods, fires or other natural disasters in these locations, as well as labor or other operational difficulties or interruptions. We maintain business interruption insurance, but it may not adequately protect us from the adverse effects that could be caused by significant disruptions in our distribution facilities, such as the long term loss of customers or an erosion of our brand image. In addition, our distribution capacity is dependent on the timely performance of services by third parties. This includes the shipping of product to and from our distribution facilities, as well as partnering with third party distribution facilities in certain regions where we do not maintain our own facilities. From time to time, certain of our partners have experienced disruptions to their operations, including cyber-related disruptions. If we or our partners encounter such problems, our results of operations, as well as our ability to meet customer expectations, manage inventory, complete sales and achieve objectives for operating efficiencies could be materially adversely affected.

~~We rely significantly on information technology and any failure, inadequacy or interruption of that technology could harm our ability to effectively operate our business.~~

Our business relies on information technology. Our ability to effectively manage and maintain our inventory and internal reports, and to ship products to customers and invoice them on a timely basis depends significantly on our enterprise resource planning, warehouse management, and other information systems. We also heavily rely on information systems to process financial and accounting information for financial reporting purposes. Anysome of these privacy laws prohibit the transfer of personal information ~~systems could fail or experience a service interruption for a number of reasons, including computer viruses or malware, programming errors, hacking or~~to certain other unlawful activities, disasters or our failure to properly maintain system redundancy or protect, repair, maintain or upgrade our systems. The failure of our information systems to operate effectively or to integratejurisdictions. Compliance with ~~other systems, or a breach in security of these systems could cause delays in product fulfillment~~existing laws and ~~reduced efficiency of our operations, which~~regulations can be costly and could negatively impact our ~~financial results. If we experienced any significant disruption~~profitability. Moreover, data privacy laws and regulations continue to evolve and it may be costly for us to adjust our ~~financial information systems that we are unable~~operations to ~~mitigate, our ability to timely report our financial results could be impacted, which could negatively impact our stock price. We also communicate electronically~~comply with new requirements. Regulatory bodies throughout the world have increased enforcement efforts against companies who fail to comply with privacy requirements. Failure to comply with these regulatory standards could result in a violation of data privacy laws and regulations and subject us to legal proceedings against us by governmental entities or others, imposition of fines by governmental authorities, negative publicity and damage to our ~~employees and with third parties, such as customers, suppliers, vendors and consumers. A service interruption or shutdown~~brand image, all of which could have a ~~materially adverse~~negative impact on our ~~operating activities. Remediation and repair of any failure, problem or breach of our key information systems could require significant capital investments.~~

In addition, we interact with many of our consumers through both our e-commerce website and our mobile applications, and these systems face similar risk of interruption or attack. Consumers increasingly utilize these services to purchase our products and to engage with our Connected Fitness community. If we are unable to continue to provide consumers a user-friendly experience and evolve our platform to satisfy consumer preferences, the growth of our e-commerce business and our net revenues may be negatively impacted. The performance of our Connected Fitness business is dependent on reliable performance of its products, applications and services and the underlying technical infrastructure, which incorporate complex software. If this software contains errors, bugs or other vulnerabilities which impede or halt service, this could result in damage to our reputation and brand, loss of users or loss of revenue.

profitability.

Data security or privacy breaches could damage our reputation, cause us to incur additional expense, expose us to litigation and adversely affect our business and results of operations.

We collect ~~sensitive and~~ proprietary business information ~~as well as~~and personally identifiable information in connection with digital marketing, digital commerce, our in-store payment processing systems and our ~~Connected Fitness business. In particular, in~~digital business (including our ~~Connected Fitness business we~~MapMyFitness platform). We collect and store a variety of information regarding our ~~users,~~consumers, and on some of our platforms allow users to share their personal information with each other and with third parties. We also rely on third parties for the operation of certain of our e-commerce websites, and do not control these service providers. ~~Hackers~~Like other companies in our industry, we have in the past experienced, and ~~data thieves are increasingly sophisticated~~we expect to continue to experience, cyberattacks, including phishing, cyber fraud incidents and ~~operate large scale~~other attempts to gain unauthorized access to our systems. These attempted attacks have increased throughout the COVID-19 pandemic and ~~complex automated attacks.~~with our implementation of a hybrid work model for many of our global corporate employees. There can be no assurance that these attacks will not have a material impact in the future. Any breach of our data security or that of our service providers could result in an unauthorized release or transfer of customer, consumer, vendor ~~user~~ or employee information, or the loss of money, valuable business data or

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cause a disruption in our business. These events could give rise to unwanted media attention, damage our reputation, damage our customer, consumer or user relationships and result in lost sales, fines or lawsuits. We may also be required to expend significant capital and other resources to protect against or respond to or alleviate problems caused by a security breach, which could negatively impact our results of operations.

For example, in early 2018 an unauthorized third party acquired data associated with our Connected Fitness users' accounts for our MyFitnessPal application and website. Approximately 150 million user accounts were affected by this issue, and the affected information included usernames, email addresses and hashed passwords. We continue to face legal proceedings in connection with this incident, and we may face claims or investigations by government regulators and agencies. We may also be required to incur additional expense to further enhance our data security infrastructure.

We must also comply with increasingly complex regulatory standards throughout the world enacted to protect personal information and other data. Compliance with existing, proposed and forthcoming laws and regulations can be costly and could negatively impact our profitability. In addition, an inability to maintain compliance with these regulatory standards could result in a violation of data privacy laws and regulations and subject us to litigation or other regulatory proceedings. For example, the European Union adopted a new regulation that became effective in May 2018, called the General Data Protection Regulation (“GDPR”), which requires companies to meet new requirements regarding the handling of personal data, including its use, protection and transfer and the ability of persons whose data is stored to correct or delete such data about themselves. Failure to meet the GDPR requirements could result in penalties of up to 4% of annual worldwide revenue. The GDPR also confers a private right of action on certain individuals and associations. Other jurisdictions are considering adopting similar or stricter measures. For example, in January 2020, the California Consumer Privacy Act took effect, and establishes transparency roles and creates new data privacy rights for consumers. Any of these factors could negatively impact our profitability, result in negative publicity and damage our brand image or cause the size of our Connected Fitness community to decline.

~~We are in the process of implementing a new operating and information system, which involves risks and uncertainties that could adversely affect our business.~~

In 2015, we began the process of implementing a global operating and financial reporting information technology system, SAP Fashion Management Solution ("FMS"), as part of a multi-year plan to integrate and upgrade our systems and processes. The first phase of this implementation became operational during 2017 in our North America, EMEA and Connected Fitness operations. The next phase of this implementation became operational in 2019 in our Asia-Pacific region, and we are currently in the process of implementing FMS in our Latin American region, which is expected to become operational in 2020. Implementation of new information systems involves risks and uncertainties. Any disruptions, delays, or deficiencies in the design, implementation or application of these systems could result in increased costs, disruptions in our ability to effectively source, sell or ship our products, delays in the collection of payment from our customers or adversely affect our ability to timely report our financial results, all of which could materially adversely affect our business, results of operations, and financial condition.

Changes in tax laws and unanticipated tax liabilities could adversely affect our effective income tax rate and profitability.

We are subject to income taxes in the United States ~~(federal and state)~~ and numerous foreign jurisdictions. Our effective income tax rate could be adversely affected in the future by a number of factors, including changes in the mix of earnings in countries with differing statutory tax rates, changes in the valuation of deferred tax assets and liabilities, changes in tax laws and regulations or their interpretations and application, the outcome of income tax audits in various jurisdictions around the world, and any repatriation of non-U.S. earnings for which we have not previously provided applicable foreign withholding taxes, certain U.S. state income taxes, or foreign exchange rate impacts.

For example, the United States enacted the Tax Cuts and Jobs Act (the “Tax Act”) on December 22, 2017, which had a significant impact to our provision for income taxes. The Tax Act requires complex computations to be performed that were not previously required under U.S. tax law, significant judgments to be made in interpretation of the provisions of the Tax Act, and the preparation and analysis of information not previously relevant or regularly produced. The U.S. Treasury Department, the Internal Revenue Service, and U.S. states taxing authorities could interpret or issue guidance on how provisions of the Tax Act will be applied or otherwise administered that is different from our interpretation.

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~~Additionally,~~Moreover, we also engage in multiple types of intercompany transactions, and our allocation of profits and losses among us and our subsidiaries through our intercompany transfer pricing arrangements are subject to review by the Internal Revenue Service and foreign tax authorities. Although we believe we have clearly reflected the economics of these transactions in accordance with current rules and regulations, which are generally consistent with the arms-length standard, and the proper documentation is in place, tax authorities may propose and sustain adjustments that could result in changes that may materially impact our tax provision. ~~Moreover,~~

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Additionally, many countries have implemented legislation and other guidance to align their international tax rules with the Organization for Economic Co-operation and ~~Development~~Development's ("OECD") Base Erosion and ~~many~~Profit Shifting ("BEPS") recommendations and action plan, which aim to standardize and modernize global corporate tax policy and include changes to cross-border tax, transfer pricing documentation rules and nexus-based tax incentive practices. As a result of this heightened scrutiny, we may experience an increase in income tax audits. In addition, prior decisions by tax authorities regarding treatments and positions of corporate income taxes could be subject to enforcement activities and/or legislative investigation, which could also result in changes in tax policies or prior tax rulings. Any such activities may result in the taxes we previously paid being subject to change, which could have a material adverse impact on our tax provision.

The OECD has issued rules intended to provide governments new taxing rights over the digital economy and specific digital services (“Pillar One”), as well as the implementation of a global minimum tax (“Pillar Two”). Many countries in which we ~~do business continue~~have operations are required to, ~~evaluate changes~~or voluntarily plan to, implement Pillar Two taxes. For example, we have operations in the European Union, where member states are required to enact Pillar Two taxes by December 31, 2023, and in South Korea, which has enacted Pillar Two taxes effective for fiscal years beginning on or after January 1, 2024. The enactment of Pillar One and Pillar Two taxes in jurisdictions where we have operations could have a material adverse impact on our global transfer pricing arrangements, tax ~~laws which~~provision, cash tax liability, effective tax rate and profitability.

Failure to protect our intellectual property rights, or our conflict with the rights of others, could ~~significantly impact the allocation of profits~~damage our brand, weaken our competitive position and ~~losses among us and our subsidiaries and~~negatively impact our ~~mix~~results of ~~earnings in countries with differing statutory rates.~~

~~We regularly assess all these matters to determine the adequacy of our tax provision, which is subject to significant judgment.~~

operations.

Our ~~financial results may be adversely affected if substantial investments~~success depends in ~~businesses~~large part on our brand image. We currently rely on a combination of copyright, trademark, trade dress, patent, anti-counterfeiting and ~~operations fail~~unfair competition laws, confidentiality procedures and licensing arrangements to ~~produce expected returns.~~

~~From time to time, we may invest in business infrastructure, new businesses,~~establish and ~~expansion of existing businesses, such as the ongoing expansion of~~protect our ~~network of brand and factory house stores and~~intellectual property rights. Despite our distribution facilities, investments to implement our global operating and financial reporting information technology system, or investments to support our digital strategy. These investments require substantial cash investments and management attention. We believe cost effective investments are essential to business growth and profitability. The failure of any significant investment to provide the returns or synergies we expect could adversely affect our financial results. Infrastructure investments may also divert funds from other potential business opportunities.

~~Our future success is substantially dependent on the continued service of our senior management and other key employees.~~

Our future success is substantially dependent on the continued service of our senior management and other key employees, particularly Kevin A. Plank, our founder, Executive Chairman and Brand Chief and Patrik Frisk, our Chief Executive Officer and President and other top executives. The loss of the services of our senior management or other key employees could make it more difficult to successfully operate our business and achieve our business goals.

We also may be unable to retain existing management, product creation, innovation, sales, marketing, operational and other support personnel that are critical to our success, which could result in harm to key customer relationships, loss of key information, expertise or know-how and unanticipated recruitment and training costs.

~~If we are unable to attract and retain new team members, including senior management,~~strategic enforcement efforts, we may not be able to ~~achieve our business objectives.~~

To be successful in continuing to profitably grow our business and manage our operations, we will need to continue to attract, retain and motivate highly talented management and other employees with a range of skills and experience. Competition for employees in our industry is intense and we have experienced difficulty from time to time in attracting the personnel necessary to support the growthprevent adequately infringement of our ~~business,~~trademarks and we may experience similar difficulties in the future. If we are unable to attract, assimilate and retain management and other employees with the necessary skills, we may not be able to grow or successfully operate our business and achieve our long term objectives.

~~A number~~proprietary rights by others, including imitation of our ~~fabrics~~products and ~~manufacturing technology are not patented~~misappropriation of our brand, and ~~can~~intellectual property protection may be ~~imitated by our competitors.~~

~~The~~unavailable or limited in some jurisdictions. In addition, intellectual property rights in the technology, fabrics and processes used to manufacture the majority of our products are generally owned or controlled by our suppliers and are generally not unique to ~~us. Our ability to obtain patent protection for our products is limited~~us, and ~~we currently own a limited number of fabric or process patents. As a result,~~ our current and future competitors are able to manufacture and sell products with performance characteristics and fabrications similar to certain of our products. Because many of our competitors have significantly greater financial, distribution, marketing and other resources than we do, they may be able to manufacture and sell products based on certain of our fabrics and manufacturing technology at lower prices than we can. If our competitors do sell similar products to ours at lower prices, our net revenues and profitability could be materially adversely affected.

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~~Our intellectual property rights and product offerings could potentially conflict with the rights of others and we may be prevented from selling or providing some of our products.~~

Our success depends in large part on our brand image. We believe our registered and common law trademarks have significant value and are important to identifying and differentiating our products from those of our competitors and creating and sustaining demand for our products. In addition, patents are increasingly important with respect to our innovative products and new businesses and investments, including our digital business. From time to time, we have ~~received or~~ brought claims relating to the enforcement of our intellectual property rights against others or have discovered unauthorized products in the marketplace that are either counterfeit reproductions of our products or unauthorized irregulars that do not meet our quality control standards. If we fail to protect, maintain and enforce our intellectual property rights, the value of our brand could decrease and our competitive position may suffer. In addition, from time to time others ~~and we expect such~~may seek to enforce infringement claims will continue or increase, particularly as we expand our business and the number of products we offer. Any such claim, regardless of its merit, could be expensive and time consuming to defend or prosecute.against us. Successful infringement claims against us could result in significant monetary liability or prevent us from selling or providing some of our products. ~~In addition,~~The resolution of such claims may require us to pull product from the market, redesign our products, license rights belonging to third parties or cease using those rights altogether. Any of these events could harm our business and have a material adverse effect on our results of operations and financial condition.

~~Our failure to protect our intellectual property rights could diminish the value of our brand, weaken our competitive position and reduce our net revenues.~~

We currently rely on a combination of copyright, trademark and trade dress laws, patent laws, unfair competition laws, confidentiality procedures and licensing arrangements to establish and protect our intellectual property rights. The steps taken by us to protect our proprietary rights may not be adequate to prevent infringement of our trademarks and proprietary rights by others, including imitation of our products and misappropriation of our brand. In addition, intellectual property protection may be unavailable or limited in some foreign countries where laws or law enforcement practices may not protect our proprietary rights as fully as in the United States, and it may be more difficult for us to successfully challenge the use of our proprietary rights by other parties in these countries. If we fail to protect and maintain our intellectual property rights, the value of our brand could be diminished and our competitive position may suffer.

From time to time, we discover unauthorized products in the marketplace that are either counterfeit reproductions of our products or unauthorized irregulars that do not meet our quality control standards. If we are unsuccessful in challenging a third party’s products on the basis of trademark infringement, continued sales of their products could adversely impact our brand, result in the shift of consumer preferences away from our products and adversely affect our business.

We have licensed in the past, and expect to license in the future, certain of our proprietary rights, such as trademarks or copyrighted material, to third parties. These licensees may take actions that diminish the value of our proprietary rights or harm our reputation.

We are the subject of a number of ongoing legal proceedings that have resulted in significant expense, and adverse developments in our ongoing proceedings and/or future legal proceedings could have a material adverse effect on our business, reputation, financial condition, results of operations or stock price.

We are ~~currently~~actively involved in a variety of litigation ~~investigations~~ and other legal matters and may be subject to additional litigations, investigations, arbitration proceedings, audits, regulatory inquiries and similar actions, including matters related to commercial disputes, intellectual property, employment, securities laws, disclosures, environmental, tax, accounting, insurance coverage, class action and product liability, as well as trade, regulatory and other claims related to our business and our industry, which we refer to collectively as legal proceedings. For example, we are subject to an ongoing securities class action proceeding regarding our prior disclosures (including regarding the use of "pull forward" sales) and derivative complaints regarding related matters, as well as past related party transactions, among other legal proceedings. Refer to Note 89 to our Consolidated Financial Statements ~~included in Part II, Item 8~~ of this Annual Report on Form 10-K for additional information regarding these specific matters. In addition, as previously disclosed in November 2019, we have been responding to requests for documents and information from the U.S. Securities and Exchange Commission and Department of Justice regarding certain of our accounting practices and related disclosures.

Legal proceedings in general, and securities and class action litigation and regulatory investigations in particular, can be expensive and disruptive. We cannot predict the outcome of any particular legal proceeding, or whether ongoing legal proceedings will be resolved favorably or ultimately result in charges or material damages, fines or other penalties. Our insurance may not cover all claims that may be asserted against us, and we are unable

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to predict how long the legal proceedings to which we are currently subject will continue. ~~In addition, we cannot predict the~~An unfavorable outcome of any ~~particular~~legal proceeding ~~or whether ongoing investigations will be resolved favorably or ultimately result in enforcement actions, charges or material damages, fines or other penalties. An unfavorable outcome~~ may have ana material adverse impact on our business, financial condition and results of operations or

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our stock price. Any legal proceeding could negatively impact our reputation among our customers or our shareholders. Furthermore, publicity surrounding ongoing legal proceedings, even if resolved favorably for us, could result in additional legal proceedings against us, as well as damage our brand image.

~~The trading prices for our Class A and Class C common stock may differ and fluctuate from time to time.~~

The trading prices of our Class A and Class C common stock may differ and fluctuate from time to time in response to various factors, some of which are beyond our control. These factors may include, among others, overall performance of the equity markets and the economy as a whole, variations in our quarterly results of operations or those of our competitors, our ability to meet our published guidance and securities analyst expectations, or recommendations by securities analysts. In addition, our non-voting Class C common stock has traded at a discountRisks Related to our ~~Class A common stock, and there can be no assurance that this will not continue.~~

Common Stock

Kevin Plank, our Executive ~~Chairman~~Chair and Brand Chief, controls the majority of the voting power of our common stock.

Our Class A common stock has one vote per share, our Class B common stock has 10 votes per share and our Class C common stock has no voting rights (except in limited circumstances). Our Executive ~~Chairman~~Chair and Brand Chief, Kevin A. Plank, beneficially owns all outstanding shares of Class B common stock. As a result, Mr. Plank has the majority voting control and is able to direct the election of all of the members of our Board of Directors and other matters we submit to a vote of our stockholders. Under certain circumstances, the Class B common stock automatically converts to Class A common stock, which would also result in the conversion of our Class C common stock into Class A common stock. As specified in our charter, these circumstances include when Mr. Plank beneficially owns less than 15.0% of the total number of shares of Class A and Class B common stock outstanding, if Mr. Plank were to resign as an Approved Executive Officer of the Company (or was otherwise terminated for cause) or if Mr. Plank sells more than a specified number of any class of our common stock within a one-year period. This concentration of voting control may have various effects including, but not limited to, delaying or preventing a change of control or allowing us to take action that the majority of our ~~shareholders~~stockholders do not otherwise support. In addition, we utilize shares of our Class C common stock to fund employee equity incentive programs and may do so in connection with future stock-based acquisition transactions, which could prolong the duration of Mr. ~~Plank’s~~Plank's voting control.

The trading prices for our Class A and Class C common stock may differ and fluctuate from time to time.

The trading prices of our Class A and Class C common stock may differ and fluctuate from time to time in response to various factors, some of which are beyond our control. These factors may include, among others, overall performance of the equity markets and the economy as a whole, variations in our quarterly results of operations or those of our competitors, our ability to meet our published guidance and securities analyst expectations, or recommendations by securities analysts. In addition, our non-voting Class C common stock has traded at a discount to our Class A common stock, and there can be no assurance that this will not continue.


~~ITEM 1B.~~			ITEM 1B. UNRESOLVED STAFF COMMENTS

Not applicable.

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ITEM 2.			PROPERTIES

The following includes a summary of the principal properties that we own or lease as of ~~December~~March 31, ~~2019.~~2023.

Our principal executive and administrative offices are located at an office complex in Baltimore, Maryland, the majority of which we own and a portion of which we lease. We also own office space and undeveloped acreage in the Baltimore Peninsula, an area of Baltimore, Maryland previously referred to as Port Covington, which we are in the process of renovating and further developing. We expect to move our principal executive and administrative offices to this location by late 2024. For each of our ~~European,~~EMEA, Latin America and ~~Asia Pacific~~Asia-Pacific headquarters, we lease office space. ~~Additionally, we lease space in Austin, Texas and San Francisco, California for our Connected Fitness business.~~

We lease our primary distribution facilities, which are located in Sparrows Point, Maryland, Mount Juliet, Tennessee and Rialto, California. Combined, these facilities represent approximately 3.5 million square feet of facility space. These leases expire at various dates, with the earliest lease termination date ~~through May 2023.~~occurring in December 2027. We believe our distribution facilities and space available through our third-party logistics providers will be adequate to meet our short term needs.

In addition, as of ~~December~~March 31, ~~2019,~~2023, we leased ~~388 brand~~439 Brand and ~~factory house~~Factory House stores located primarily in the United States, China, Canada, Mexico, Korea, Chile, Australia, the United Kingdom, and ~~Canada~~Malaysia with lease ~~end~~

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termination dates occurring in ~~2019~~2023 through ~~2033.~~2035. We also lease additional office space for sales, quality assurance and sourcing, marketing and administrative functions. We anticipate that we will be able to extend these leases that expire in the near future on satisfactory terms or relocate to other locations.


ITEM 3.			LEGAL PROCEEDINGS

From time to time, we have been involved in litigation and other proceedings, including matters related to commercial disputes and intellectual property, as well as trade, regulatory and other claims related to our business. ~~Refer to~~See Note 89 to our Consolidated Financial Statements for information on certain legal proceedings, which is incorporated by reference herein.

~~Information About Our Executive Officers~~

~~Our executive officers are:~~

~~Name~~

~~Age~~

~~Position~~

~~Kevin Plank~~

~~Executive Chairman and Brand Chief~~

~~Patrik Frisk~~

~~Chief Executive Officer and President~~

~~David Bergman~~

~~Chief Financial Officer~~

~~Colin Browne~~

~~Chief Operating Officer~~

~~Kevin Eskridge~~

~~Chief Product Officer~~

~~Paul Fipps~~

~~Chief Experience Officer~~

~~Alessandro de Pestel~~

~~Chief Marketing Officer~~

~~Stephanie Pugliese~~

~~President of North America~~

~~Tchernavia Rocker~~

~~Chief People and Culture Officer~~

~~John Stanton~~

~~General Counsel and Corporate Secretary~~

~~Kevin Plank~~ has been Executive Chairman and Brand Chief since January 2020. Prior to that, he served as Chief Executive Officer and Chairman of the Board of Directors from 1996, when he founded our Company, to 2019, and President from 1996 to July 2008 and August 2010 to July 2017. Mr. Plank also serves on the Board of Directors of the National Football Foundation and College Hall of Fame, Inc., and is a member of the Board of Trustees of the University of Maryland College Park Foundation.

~~Patrik Frisk~~ has been Chief Executive Officer and President and a member of our Board of Directors since January 2020. Prior to that, he served as President and Chief Operating Officer from July 2017 to December 2019. Prior to Under Armour, he was Chief Executive Officer of The ALDO Group, a global footwear and accessories company. Previous to that, he spent more than a decade with VF Corporation where he held numerous leadership positions including Coalition President of Outdoor Americas (The North Face® and Timberland®), President of the Timberland® brand, President of Outdoor & Action Sports (EMEA), and Vice President and General Manager of The

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~~North Face®. Before joining VF Corporation, Mr. Frisk ran his own retail business in Scandinavia and held senior positions with Peak Performance and W.L. Gore & Associates.~~

~~David Bergman~~ has been Chief Financial Officer since November 2017. Mr. Bergman joined the Company in 2005 and has served in various Finance and Accounting leadership roles for the Company, including Corporate Controller from 2006 to October 2014, Vice President of Finance and Corporate Controller from November 2014 to January 2016, Senior Vice President, Corporate Finance from February 2016 to January 2017, and acting Chief Financial Officer from February 2017 to November 2017. Prior to joining the Company, Mr. Bergman worked as a C.P.A. within the audit and assurance practices at Ernst & Young LLP and Arthur Andersen LLP.

~~Colin Browne~~ has been Chief Operating Officer since February 2020. Prior to that, he served as Chief Supply Chain Officer from July 2017 to January 2020 and President of Global Sourcing from September 2016 to June 2017. Prior to joining our Company, he served as Vice President and Managing Director for VF Corporation, leading its sourcing and product supply organization in Asia and Africa from November 2013 to August 2016 and as Vice President of Footwear Sourcing from November 2011 to October 2013. Prior thereto, Mr. Browne served as Executive Vice President of Footwear and Accessories for Li and Fung Group LTD from September 2010 to November 2011 and Chief Executive Officer, Asia for Pentland Brands PLC from April 2006 to January 2010. Mr. Browne has over 25 years of experience leading sourcing efforts for large brands.

~~Kevin Eskridge~~ has been Chief Product Officer since May 2017, with oversight of the Company’s category management, product, merchandising and design functions. Mr. Eskridge joined our Company in 2009 and has served in various leadership roles including Senior Director, Outdoor from September 2009 to September 2012, Vice President, China from October 2012 to April 2015, Senior Vice President, Global Merchandising from May 2015 to June 2016 and President, Sports Performance from July 2016 to April 2017. Prior to joining our Company, he served as Vice President, Merchandising of Armani Exchange from 2006 to 2009.

~~Paul Fipps~~ has been Chief Experience Officer since February 2020. Prior to that, he served as Chief Digital Officer from April 2018 to January 2020, Chief Technology Officer from July 2017 to March 2018, Chief Information Officer from March 2015 and Executive Vice President of Global Operations from September 2016 to June 2017 and as Senior Vice President of Global Operations from January 2014 to February 2015. Prior to joining our Company, he served as Chief Information Officer and Corporate Vice President of Business Services at Breakthru Beverage Group, formerly The Charmer Sunbelt Group ("CSG"), a leading distributor of fine wines, spirits, beer, bottled water and other beverages from May 2009 to December 2013, as Vice President of Business Services from January 2007 to April 2009 and in other leadership positions for CSG from 1998 to 2007.

~~Alessandro de Pestel~~ has been Chief Marketing Officer since October 2018. Prior to joining our Company, he served as Executive Vice President of Global Marketing, Communications and Consumer Insights for Tommy Hilfiger Global from October 2014 to September 2018 and as Senior Vice President of Marketing and Communication from January 2007 to September 2014. Prior thereto, Mr. de Pestel served in various leadership roles in Marketing and Communications at brands such as Calvin Klein, Fila, Omega and Christian Dior from 1999 to 2006.

~~Stephanie Pugliese~~ has been President of North America since September 2019. Prior to joining our Company, Ms. Pugliese served as Chief Executive Officer and President of Duluth Trading Company from February 2015 to August 2019, and as President from February 2012 to August 2019. Prior thereto, Ms. Pugliese served as President and Chief Operating Officer of Duluth Trading Company from February 2014 to February 2015, Senior Vice President and Chief Merchandising Officer from July 2010 to February 2012 and as Vice President of Product Development from November 2008 to July 2010. Ms. Pugliese also served in various leadership roles with Lands’ End, Inc. from 2005 to 2008 and at Ann Inc. from 2000 to 2003.

~~Tchernavia Rocker~~ has been Chief People and Culture Officer since February 2019. Prior to joining our Company, she served more than 18 years in Human Resources leadership roles at Harley-Davidson, Inc., most recently as Vice President and Chief Human Resources Officer from June 2016 through January 2019, as General Manager, Human Resources from January 2012 through May 2016, and in various other Human Resources leadership positions since joining the company in 2000. Prior to that, she served in various HR and operations roles at Goodyear Dunlop North America Tire Inc.

~~John Stanton~~ has been General Counsel since March 2013, and Corporate Secretary since February 2008. Prior thereto, he served as Vice President, Corporate Governance and Compliance from October 2007 to February 2013 and Deputy General Counsel from February 2006 to September 2007. Prior to joining our Company, he

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served in various legal roles at MBNA Corporation from 1993 to 2005, including as Senior Executive Vice President, Corporate Governance and Assistant Secretary. He began his legal career at the law firm Venable, LLP.


~~ITEM 4.~~			ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

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~~PART II~~

PART II.


~~ITEM 5.~~			~~MARKET FOR REGISTRANT’S~~ ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Table of ~~letters of credit. There were $5.0 million of letters of credit outstanding as of December 31, 2019.~~

The credit agreement contains negative covenants that, subject to significant exceptions, limit our ability to, among other things, incur additional indebtedness, make restricted payments, pledge our assets as security, make investments, loans, advances, guarantees and acquisitions, undergo fundamental changes and enter into transactions with affiliates. We are also required to maintain a ratio of consolidated EBITDA, as defined in the credit agreement, to consolidated interest expense of not less than 3.50 to 1.00 and we are not permitted to allow the ratio of consolidated total indebtedness to consolidated EBITDA to be greater than 3.25 to 1.00 ("consolidated leverage ratio"). As of December 31, 2019, we were in compliance with these ratios. In addition, the 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 credit agreement, will be considered an event of default under the credit agreement.

Borrowings under the credit agreement bear interest at a rate per annum equal to, at our option, either (a) an alternate base rate, or (b) a rate based on the rates applicable for deposits in the interbank market for U.S. Dollars or the applicable currency in which the loans are made (“adjusted LIBOR”), 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 consolidated leverage ratio and ranges between 1.00% to 1.25% for adjusted LIBOR loans and 0.00% to 0.25% for alternate base rate loans. The weighted average interest rate under the outstanding term loans was 3.2% during the year ended December 31, 2018. During the year ended December 31, 2019, there were no borrowings under the outstanding term loan. The weighted average interest rate under the revolving credit facility borrowings was 3.6% and 3.0% during the years ended December 31, 2019 and 2018, respectively. We pay a commitment fee on the average daily unused amount of the revolving credit facility and certain fees with respect to letters of credit. As of December 31, 2019, the commitment fee was 15 basis points. Since inception, we incurred and deferred $3.4 million in financing costs in connection with the credit agreement.Contents

~~3.250% Senior Notes~~

~~In June 2016,~~As of the date of this Annual Report on Form 10-K, we ~~issued $600.0~~have repurchased a total of $425 million ~~aggregate principal amount~~or 34.9 million outstanding shares of ~~3.250% senior unsecured notes due June 15, 2026 (the “Notes”). The proceeds were used to pay down amounts outstanding~~our Class C Common Stock under the revolving credit facility. 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 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 Notes to be redeemed or a “make-whole” amount applicable to such Notes as described in the indenture governing the Notes, plus accrued and unpaid interest to, but excluding, the redemption date. On or after March 15, 2026 (three months prior to the maturity date of the Notes), we may redeem some or all of the Notes at any time or from time to time at a redemption price equal to 100% of the principal amount of the Notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date.

The indenture governing the 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. We incurred and deferred $5.3 million in financing costs in connection with the Notes.

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~~Other Long Term Debt~~

In December 2012, we entered into a $50.0 million recourse loan collateralized by the land, buildings and tenant improvements comprising our corporate headquarters. In July 2018, this loan was repaid in full, without penalties, using borrowings under our revolving credit facility.

Interest expense, net was $21.2 million, $33.6 million, and $34.5 million for the years ended December 31, 2019, 2018 and 2017, respectively. Interest expense includes the 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. Amortization of deferred financing costs was $2.4 million, $1.5 million, and $1.3 million for the years ended December 31, 2019, 2018 and 2017, respectively.

We monitor the financial health and stability of our 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.

share repurchase program.

Contractual Commitments ~~and Contingencies~~

We lease warehouse space, office facilities, space for our ~~brand~~Brand and ~~factory house~~Factory House stores and certain equipment under non-cancelable operating leases. The leases expire at various dates through 2035, excluding extensions at our option, and include provisions for rental adjustments. In addition, this table includes executed lease agreements for ~~brand~~Brand and ~~factory house~~Factory House stores that we did not yet occupy as of ~~December~~March 31, ~~2019.~~2023. The operating leases generally contain renewal provisions for varying periods of time. Our significant contractual obligations and commitments as of ~~December~~March 31, ~~2019 as well as significant agreements entered into during the period after December 31, 2019 through the date of this report~~2023 are summarized in the following table:

Payments Due by Period
(in thousands) Total
Less Than
1 Year
1 to 3 Years 3 to 5 Years
More Than
5 Years
Contractual obligations
Long term debt obligations (1) $ 726,750 $ 19,500 $ 39,000 $ 39,000 $ 629,250
Operating lease obligations (2) 1,341,292 157,217 324,575 264,192 595,308
Product purchase obligations (3) 1,087,634 1,087,634 — — —
Sponsorships and other (4) 679,109 131,297 219,662 186,796 141,354
Transition Tax Related to the Tax Act (5) 10,865 — 1,130 3,293 6,442
Total $ 3,845,650 $ 1,395,648 $ 584,367 $ 493,281 $ 1,372,354


	Payments Due by Period
(In thousands)	Total		Less Than 1 Year		1 to 3 Years		3 to 5 Years		More Than 5 Years
Long term debt obligations (1)	$	750,990	$	20,714	$	120,526	$	609,750	$	—
Operating Lease obligations (2)	1,027,700		176,218		290,688		199,724		361,070
Product purchase obligations (3)	1,161,097		1,161,097		—		—		—
Sponsorships and other (4)	412,425		83,342		189,758		40,575		98,750
Total future minimum payments	$	3,352,212	$	1,441,371	$	600,972	$	850,049	$	459,820

(1) Includes estimated interest payments based on applicable fixed ~~and currently effective floating~~ interest rates as of ~~December~~March 31, ~~2019,~~2023, timing of scheduled payments, and the term of the debt obligations.

(2) Includes the minimum payments for lease obligations. The lease obligations do not include any contingent rent expense we may incur at our ~~brand~~Brand and ~~factory~~Factory house stores based on future sales above a specified minimum or payments made for maintenance, insurance and real estate taxes. Contingent rent expense was ~~$12.9~~$14.2 million for the year ended December 31, 2019. In February 2020, we announced that we are considering foregoing opening a flagship store in New York City while pursuing sublet options for the long-term lease. The amounts included above reflect our existing contractual obligations with respect to that lease, which totaled $506.2 million as of December 31, 2019.Fiscal 2023.

(3) We generally place orders with our manufacturers at least three to four months in advance of expected future sales. The amounts listed for product purchase obligations primarily represent our open production purchase orders with our manufacturers for our apparel, footwear and accessories, including expected inbound freight, duties and other costs. These open purchase orders specify fixed or minimum quantities of products at determinable prices. The product purchase obligations also includes fabric commitments with our suppliers, which secure a portion of our material needs for future seasons. The reported amounts exclude product purchase liabilities included in accounts payable as of ~~December~~March 31, ~~2019.~~2023.

(4) Includes sponsorships with professional teams, professional leagues, colleges and universities, individual athletes, athletic events and other marketing commitments in order to promote our brand. Some of these sponsorship agreements provide for additional performance incentives and product supply obligations. It is not possible to determine how much we will spend on product supply obligations on an annual basis as contracts generally do not stipulate specific cash amounts to be spent on products. The amount of product

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provided to these sponsorships depends on many factors including general playing conditions, the number of sporting events in which they participate and our decisions regarding product and marketing initiatives. In addition, it is not possible to determine the performance incentive amounts we may be required to pay under these agreements as they are primarily subject to certain performance based and other variables. The amounts listed above are the fixed minimum amounts required to be paid under these sponsorship agreements. Additionally, these amounts include minimum guaranteed royalty payments to endorsers and licensors based upon a predetermined percent of sales of particular products.

~~(5) Represents the future cash payments due related to the Tax Act enacted in 2017 as part of the one-time transition tax on deemed repatriation of undistributed earnings of foreign subsidiaries.~~

The table above excludes a liability of ~~$37.2~~$58.8 million for uncertain tax positions, ~~including the~~inclusive of related interest and penalties, ~~recorded in accordance with applicable accounting guidance,~~ as ~~we are~~the Company is unable to reasonably estimate the timing an amount of future cash settlement. Refer to Note 1117 to the Consolidated Financial Statements for a further discussion of our uncertain tax positions.

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:


(In thousands)	Year ended March 31, 2023		Twelve months ended March 31, 2022		Change $
Net cash provided by (used in):
Operating activities	$	(9,914)	$	493,974	$	(503,888)
Investing activities	(152,796)		(100,365)		(52,431)
Financing activities	(126,375)		(725,806)		599,431
Effect of exchange rate changes on cash and cash equivalents	(5,315)		(5,357)		42
Net increase (decrease) in cash and cash equivalents	$	(294,400)	$	(337,554)	$	43,154

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Operating Activities

Cash flows from operating activities decreased by $503.9 million, as compared to the twelve months ended March 31, 2022, primarily driven by a decrease in net income before the impact of non-cash items of $54.0 million and a decrease from changes in working capital of $449.9 million.

The changes in working capital were due to the following outflows:

•$411.3 million from changes in inventories;

•$140.7 million from changes in other non-current assets;

•$69.5 million from changes in accounts receivable; and

•$20.3 million from changes in prepaid expenses and other current assets.

These outflows were partially offset by the following working capital inflows:

•$127.6 million from changes in accrued expenses and other liabilities;

•$33.2 million from changes in customer refund liabilities;

•$26.4 million from changes in accounts payable; and

•$5.0 million from changes in income taxes payable and receivable, net.

Investing Activities

Cash flows used in investing activities increased by $52.4 million, as compared to the twelve months ended March 31, 2022. This was primarily due to an increase in capital expenditures, partially offset by the collection of the year one earn-out previously recorded in connection with the sale of the MyFitnessPal platform.

Total capital expenditures during Fiscal 2023 were $187.8 million, or approximately 3% of net revenues, representing an $86.6 million increase from $101.2 million during the twelve months ended March 31, 2022. During Fiscal 2021, we reduced capital expenditures in response to ongoing uncertainty related to COVID-19. Our long-term operating principle for capital expenditures is to spend between 3% and 5% of annual net revenues as we invest in our global direct-to-consumer, e-Commerce and digital businesses, information technology systems, distribution centers and our global offices, including our new global headquarters in the Baltimore Peninsula, an area of Baltimore, Maryland, previously referred to as Port Covington. During Fiscal 2023, we incurred capital expenditures of $68.1 million relating to the construction of our new global headquarters. As previously disclosed, our plans for our new headquarters have been designed in line with our long-term sustainability strategy and include a commitment to reduce greenhouse gas emissions and increase sourcing of renewable electricity in our owned and operated facilities. We expect a portion of our capital expenditures over the next few years to include investments incorporating sustainable and intelligent building design features into this facility.

Financing Activities

Cash flows used in financing activities decreased by $599.4 million, as compared to the twelve months ended March 31, 2022. During the twelve months ended March 31, 2022, we paid $506.3 million to certain exchanging holders for the exchange of approximately $419.1 million in aggregate principal amount of our 1.50% Convertible Senior Notes. Concurrently with these exchanges we terminated certain capped call agreements and in exchange received approximately $91.7 million. For more details, see discussion below under "1.50% Convertible Senior Notes". Additionally, during Fiscal 2023 and the twelve months ended March 31, 2022, we paid $125.0 million and $300.0 million, respectively, to repurchase shares of our Class C Common Stock through accelerated share repurchase programs. For more details, see discussion above under "Share Repurchase Program".

~~Off-Balance Sheet Arrangements~~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"). In May 2020, May 2021 and December 2021, we entered into the first, second and third amendments to the credit agreement, respectively (the credit agreement as amended and the "amended credit agreement" or the "revolving credit facility"). The amended credit agreement provides for revolving credit commitments of $1.1 billion and has a term that ends on December 3, 2026, with permitted extensions under certain circumstances. As of March 31, 2023 and March 31, 2022, there were no amounts outstanding under the revolving credit facility.

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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 March 31, 2023, there was $4.4 million of letters of credit outstanding (March 31, 2022: $4.5 million).

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 provides for the permanent fall away of guarantees and collateral upon our achievement of investment grade rating from two rating agencies.

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 March 31, 2023, 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.

The amended credit agreement implements SOFR as the replacement of LIBOR as a benchmark interest rate for the U.S. dollar borrowings (and analogous benchmark rate replacements for borrowings in Yen, Canadian dollars, Pound Sterling and Euro). Borrowings under the amended credit agreement bear interest at a rate per annum equal to, at our option, either (a) an alternate base rate (for borrowings in U.S. dollars), (b) a term rate (for borrowings in U.S. dollars, Euros, Japanese Yen or Canadian dollars) or (c) a "risk free" rate (for borrowings in U.S. dollars or Pounds Sterling), plus in each case an applicable margin. The applicable margin for loans will be adjusted by reference to a grid (the "pricing grid") based on the leverage ratio of consolidated total indebtedness to consolidated EBITDA and ranges between 1.00% to 1.75% (or, in the case of alternate base rate loans 0.00% to 0.75%). 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. As of March 31, 2023, the commitment fee was 17.5 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 fixed rate of 1.50% per annum, payable semiannually in arrears on June 1 and December 1 of each year, beginning December 1, 2020. The Convertible Senior Notes will mature on June 1, 2024, unless earlier converted in accordance with their terms, redeemed in accordance with their terms or repurchased.

The net proceeds from the offering (including the net proceeds from the exercise of the over-allotment option) were $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.

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During Fiscal 2021, we entered into exchange agreements with certain holders of the Convertible Senior Notes, who agreed to exchange approximately $419.1 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 "Exchanges"). In connection with ~~various contracts~~the Exchanges, we paid approximately $507.0 million cash and ~~agreements,~~issued approximately 18.8 million shares of the Company's Class C Common Stock to the exchanging holders. Additionally, we ~~have agreed~~recognized losses on debt extinguishment of $58.5 million during Fiscal 2021, within Other Income (Expense), net on our Consolidated Statements of Operations. Following the Exchanges, approximately $80.9 million aggregate principal amount of the Convertible Senior Notes remain outstanding as of March 31, 2023.

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 ~~indemnify~~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.

Beginning on 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 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.

During Fiscal 2021, concurrently with the Exchanges, we entered into, with each of the option counterparties, ~~against certain third party claims~~termination agreements relating to a number of options corresponding to the ~~infringement~~number of ~~intellectual property rights~~Convertible Senior Notes exchanged. Pursuant to such termination agreements, each of the option counterparties paid us a

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cash settlement amount in respect of the portion of capped call transactions being terminated. We received approximately $91.7 million in connection with such termination agreements related to the Exchanges.

The Convertible Senior Notes contain a cash conversion feature. Prior to the adoption of Accounting Standards Update ("ASU") No. 2020-06 "Debt - Debt with Conversion and ~~other items. Generally, such indemnification obligations do~~Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity's Own Equity (Subtopic 815-40)" ("ASU 2020-06"), we had separated it into liability and equity components. We valued the liability component based on its borrowing rate for a similar debt instrument that does not ~~apply in situations in~~contain a conversion feature. The equity component, which ~~our counterparties are grossly negligent, engage in willful misconduct, or act in bad faith. Based on our historical experience~~was recognized as a debt discount, was valued as the difference between the face value of the Convertible Senior Notes and ~~the estimated probability of future loss, we have determined~~ the fair value of the liability component.

We adopted ASU 2020-06 on January 1, 2022 using the modified retrospective method. As a result, the Convertible Senior Notes are no longer accounted for as separate liability and equity components, but rather a single liability. See Note 2 to the Condensed Consolidated Financial Statements included in Part I of our Transition Report on Form 10-QT for the three months ended March 31, 2022 for more details.

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. The Senior Notes bear interest at the fixed rate of 3.250% per annum, payable semi-annually on June 15 and December 15 beginning December 15, 2016. 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 ~~indemnifications is not~~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 ~~to our financial position or results of operations.~~exceptions described in the indenture.

~~Critical Accounting Policies and Estimates~~CRITICAL ACCOUNTING ESTIMATES AND ASSUMPTIONS

Our ~~consolidated financial statements~~Consolidated Financial Statements have been prepared in accordance with ~~accounting principles generally accepted in the United States of America.~~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 discussion 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. We consider 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.

There were no significant changes to our critical accounting policies during the year ended December 31, 2019. The following description of our critical accounting policies largely summarize generally accepted accounting principles in the United States and are meant to provide clarity regarding our existing application of Actual results could be significantly different from these ~~policies.~~

estimates.

Revenue Recognition

We recognize revenue pursuant to Accounting Standards Codification 606 ("ASC 606"). Net revenues consist of net sales of apparel, footwear and accessories, license and Connected Fitness revenue. We recognize revenue when we satisfy our performance obligations by transferring control of promised products or services to our 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 we ultimately expect 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 our revenues from product sales are presented on a net basis within the 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. We satisfy the performance obligation and record revenues when transfer of control has passed to the customer, based on the terms of sale. In our 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

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country of the sale and the agreement with the customer. We may also ship product directly from our supplier to wholesale customers and recognize revenue when the product is delivered to and accepted by the customer. In our 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 us are recorded as contract liabilities until they are redeemed, at which point revenue is recognized. We also estimate and recognize revenue for gift card balances not expected to ever be redeemed ("breakage") to the extent that we do 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 our licensing arrangements is recognized over time during the period that licensees are provided access to our 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. We recognize 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. 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 we are entitled to receive in exchange for providing access to our trademarks.

Revenue from Connected Fitness subscriptions is recognized on a gross basis and is recognized over the term of the subscription. We receive payments in advance of revenue recognition for subscriptions and these payments are recorded as contract liabilities in our consolidated balance sheet. Related commission cost is included in selling, general and administrative expense in the consolidated statement of operations. Revenue from Connected Fitness digital advertising is recognized as we satisfy performance obligations pursuant to customer insertion orders.

We record reductions to revenue at the time of the transaction for estimated customer returns, allowances, markdowns and discounts. We base these 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 us. The actual amount of customer returns and allowances, which are inherently uncertain, may differ from our estimates. If we determine that actual or expected returns or allowances are significantly higher or lower than the reserves we established, we would record a reduction or increase, as appropriate, to net sales in the period in which we make such a determination. Provisions for customer specific discounts are based on contractual obligations 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 ~~consolidated balance sheet.~~Consolidated Balance Sheets. As of ~~December~~March 31, ~~2019~~2023 and ~~2018,~~2022, there were ~~$219.4~~$160.5 million and ~~$301.4~~$159.6 million, respectively, in reserves for returns, allowances, markdowns and discounts within customer refund liability and ~~$61.1~~$40.7 million and ~~$113.9~~$44.3 million, respectively, as the estimated value of inventory associated with the reserves for sales returns within prepaid expenses and other current assets on the ~~consolidated balance sheet. Refer to Note 2 to the~~ Consolidated ~~Financial Statements for a further discussion~~Balance Sheets.

Table of ~~revenue recognition.~~Contents

Allowance for Doubtful Accounts

We make ongoing estimates relating to the collectability of accounts receivable and maintain an allowance for estimated losses resulting from the inability of our customers to make required payments. In determining the amount of the reserve, we consider historical levels of credit losses and significant economic developments within the retail environment that could impact the ability of our customers to pay outstanding balances and make ~~judgment~~judgments about the creditworthiness of significant customers based on ongoing credit evaluations. Because we cannot predict future changes in the financial stability of our customers, actual future losses from uncollectible accounts may differ from estimates. If the financial condition of customers were to deteriorate, resulting in their inability to make payments, a larger reserve might be required. In the event we determine a smaller or larger reserve is appropriate, we would record a benefit or charge to selling, general and administrative expense in the

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period in which such a determination was made. As of ~~December~~March 31, ~~2019~~2023 and ~~2018,~~2022, the allowance for doubtful accounts was ~~$15.1~~$10.8 millionand ~~$22.2~~$7.1 million, respectively.

Inventory Valuation and Reserves

Inventories consist primarily of finished goods. Costs of finished goods inventories include all costs incurred to bring inventory to its current condition, including inbound freight, duties and other costs. We value our inventory at standard cost which approximates landed cost, using the first-in, first-out method of cost determination. Net realizable value is estimated based upon assumptions made about future demand and retail market conditions. If we determine that the estimated net realizable value of our inventory is less than the carrying value of such inventory, we record a charge to cost of goods sold to reflect the lower of cost or net realizable value. If actual market conditions are less favorable than those that we projected, further adjustments may be required that would increase the cost of goods sold in the period in which such a determination was made. As of March 31, 2023 and 2022, the inventory reserve was$34.8 million and $26.8 million, respectively.

Goodwill, Intangible Assets and Long-Lived Assets

Goodwill and intangible assets are recorded at their estimated fair values at the date of acquisition and are allocated to the reporting units that are expected to receive the related benefits. Goodwill and indefinite lived intangible assets are not amortized and are required to be tested for impairment at least annually or sooner whenever events or changes in circumstances indicate that it is more likely than not that the fair value of the reporting unit is less than its carrying amount. In conducting an annual impairment test, we first review qualitative factors to determine whether it is more likely than not that the fair value of the reporting unit is less than its carrying amount. If factors indicate that is the case, we perform the goodwill impairment test. We compare the fair value of the reporting unit with its carrying amount. We estimate fair value using the discounted cash flows model, under the income approach, which indicates the fair value of the reporting unit based on the present value of the cash flows that we expect the reporting unit to generate in the future. Our significant estimates in the discounted cash flows model include: our weighted average cost of capital, long-term rate of growth and profitability of the reporting unit's business, and working capital effects. If the carrying amount of a reporting unit exceeds its fair value, goodwill is impaired to the extent that the carrying value exceeds the fair value of the reporting unit. ~~We perform our annual impairment testing in the fourth quarter of each year.~~

As of our annual impairment test, in the fourth quarter of 2019, no impairment of goodwill was identified. The fair value of each reporting unit substantially exceeded its carrying value, with the exception of our Latin America reporting unit. The fair value of the Latin America reporting unit exceeded its carrying value by 19%. Holding all other assumptions used in the fair value measurement of the Latin America reporting unit constant, a reduction in the growth rate of revenue by 2.25 percentage points or a reduction in the growth rate of net income by 3.5 percentage points would eliminate the headroom. No events occurred during the period ended December 31, 2019 that indicated it was more likely than not that goodwill was impaired. Refer to Note 5 to the Consolidated Financial Statements for a further discussion of goodwill.

We continually evaluate whether events and circumstances have occurred that indicate the remaining estimated useful life of long-lived assets may warrant revision or that the remaining balance may not be recoverable. These factors may include a significant deterioration of operating results, changes in business plans, or changes in anticipated cash flows. When factors indicate that an asset should be evaluated for possible impairment, we review long-lived assets to assess recoverability from future operations using undiscounted cash flows. If future undiscounted cash flows are less than the carrying value, an impairment is recognized in earnings to the extent that the carrying value exceeds fair value.

~~Equity Method Investment~~

In April 2018, we invested ¥4.2 billion or $39.2 million in exchange for an additional 10% common stock ownership in Dome Corporation ("Dome"), our Japanese licensee. This additional investment brought our total investment in Dome's common stock to 29.5%, from 19.5%. We account for our investment in Dome under the equity method, given that we have the ability to exercise significant influence, but not control, over Dome. Investments under the equity method are required to be considered for impairment when events or circumstances suggest that the carrying amount may not be recoverable. If a qualitative assessment indicates that our investment in Dome may be impaired, a quantitative assessment is performed. If the quantitative assessment indicates a decline in value that is determined to be other-than-temporary, an impairment charge would be recognized.

In connection with the preparation of our financial statements for the year ended December 31, 2019, we performed a qualitative assessment of potential impairment indicators for our investment in Dome and determined that indicators of impairment exist. While there was no single event or factor, we considered Dome's future rate of

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growth and profitability and strategic objectives. We performed a valuation of our investment in Dome and determined that the fair value of our investment is less than its carrying value by $39.0 million. We determined this decline in value to be other-than-temporary considering the extent to which the market value of our investment is less than the carrying value, the amount of Dome's indebtedness maturing within a short-term period, and Dome's long-term financial forecast. As a result, we recorded a $39.0 million impairment of our equity method investment in Dome in the fourth quarter of 2019, for the year ended December 31, 2019. The impairment charge was recorded within income (loss) from equity method investment on the consolidated statements of operations and as a reduction to the invested balance within other long term assets on the consolidated balance sheets. We calculate fair value using the discounted cash flows model, which indicates the fair value of the investment based on the present value of the cash flows that we expect the investment to generate in the future.

For the years ended December 31, 2019 and 2018, we recorded the allocable share of Dome’s net loss of $8.7 million and net income of $1.0 million, respectively, within income (loss) from equity method investment on the consolidated statements of operations and as an adjustment to the invested balance within other long term assets on the consolidated balance sheets. As of December 31, 2019 and 2018, the carrying value of our total investment in Dome was $5.1 million and $52.8 million, respectively.

In addition to the investment in Dome, we have a license agreement with Dome. We recorded license revenues from Dome of $37.8 million and $35.6 million for the years ended December 31, 2019 and 2018, respectively. As of December 31, 2019 and 2018, respectively, we have $15.6 million and $13.1 million in licensing receivables outstanding, recorded in the prepaid expenses and other current assets line item within our consolidated balance sheet. To the extent Dome continues to experience challenges in the performance of their business, we may not continue to realize the licensing revenues received from them in line with their past results.

Income Taxes

Income taxes are accounted for under the asset and liability method. Deferred income tax assets and liabilities are established for temporary differences between the financial reporting basis and the tax basis of our assets and liabilities at tax rates expected to be in effect when such assets or liabilities are realized or settled. Deferred income tax assets are reduced by valuation allowances when necessary. We have made the policy election to record any liability associated with Global Intangible Low Taxed Income (“GILTI”) in the period in which it ~~was~~is incurred.

Income taxes include the largest amount of tax benefit for an uncertain tax position that is more likely than not to be sustained upon audit based on the technical merits of the tax position. Settlements with tax authorities, the expiration of statutes of limitations for particular tax positions or obtaining new information on particular tax positions may cause a change to the effective tax rate. We recognize accrued interest and penalties related to unrecognized tax benefits in the provision for income taxes on the Consolidated Statement of Operations.

Assessing whether deferred tax assets are realizable requires significant judgment. We consider all available positive and negative evidence, including historical operating performance and expectations of future operating performance. The ultimate realization of deferred tax assets is often dependent upon future taxable income and therefore can be uncertain. To the extent we believe it is more likely than not that all or some portion of the asset will not be realized, valuation allowances are established against our deferred tax assets, which increase income tax expense in the period when such a determination is made.

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A significant portion of our deferred tax assets relate to U.S. federal and state taxing jurisdictions. Realization of these deferred tax assets is dependent on future U.S. pre-tax earnings. In evaluating the recoverability of these deferred tax assets ~~at December~~as of March 31, ~~2019,~~2023, we have considered all available evidence, both positive and negative, including but not limited to the following:

Positive

•~~2019~~Current year pre-tax ~~income plus tax permanent differences and~~earnings including positive financial taxable income in the U.S. federal ~~and certain state jurisdictions;~~jurisdiction.

•~~Three year~~Prior three-year cumulative ~~pre-tax~~positive financial taxable income ~~plus tax permanent differences~~ in the U.S. federal ~~jurisdiction;~~jurisdiction.

•Forecasted future ~~pre-tax~~positive financial taxable income ~~plus tax permanent differences~~ in the U.S. ~~federal and certain state jurisdictions;~~

•No material definite lived tax attributes (excluding capital loss) subject to expiration in the near short term.

•No history of U.S. federal and material state tax attributes expiring ~~unused;~~

•~~Restructuring plans undertaken in 2017, 2018, and being assessed for 2020, which aim to improve future profitability;~~unused.

•Available prudent and feasible tax planning ~~strategies may exist;~~strategies.

•~~Reversal of deferred tax liabilities and timing thereof.~~

Negative

•~~Three year~~Prior three-year cumulative ~~pre-tax losses plus tax permanent differences in certain state jurisdictions;~~

•~~Forecasted year over year U.S. revenue declines in 2020 which decrease profitability~~financial taxable loss in the U.S. ~~federal and certain~~ state ~~jurisdictions;~~

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•~~Restructuring plans undertaken in 2017, 2018, and being assessed for 2020, which result in significant one-time charges, which reduce profitability in the U.S. federal and certain state jurisdictions;~~jurisdictions.

•Inherent challenges in forecasting sufficient future U.S. state pre-tax earnings ~~which rely,~~to overcome existing cumulative losses in ~~part, on improved profitability from our restructuring efforts;~~prior years.

•~~The continued challenges in the U.S. consumer retail business environment.~~Existing definite life state attributes related to credits and net operating losses.

As of ~~December~~March 31, ~~2019,~~2023, we believe that the weight of the positive evidence outweighs the negative evidence regarding the realization of our U.S. federal deferred tax ~~assets. However, as~~assets, resulting in the release of ~~December~~the corresponding valuation allowances in the fourth quarter of the Fiscal 2023. The release of U.S. federal valuation allowance (excluding capital losses) resulted in a material benefit to income tax expense and net income in the period. As of March 31, ~~2019,~~2023, for U.S. states, we believe the weight of the negative evidence ~~outweighs~~continues to outweigh the positive evidence regarding the realization of the ~~majority of the~~ state deferred tax assets and have ~~recorded~~maintained a valuation allowance against these assets. Our current forecast for the U.S. indicates that there is a possibility that within the next 12 months, sufficient positive evidence may become available to reach a conclusion that a portion of the U.S state valuation allowance will no longer be required. The actualization of these forecasted results may result in a reversal of a portion of previously recorded U.S state valuation allowances in the United States. The release of valuation allowances would result in a benefit to income tax expense in the period the release is recorded. The timing and amount are subject to change based on the actual profitability that we are able to actually achieve in the United States.

As of each reporting date, management considers new evidence, both positive and negative, that could affect its view of the future realization of deferred tax assets. We will continue to evaluate our ability to realize our net deferred tax assets on a quarterly basis.

Stock-Based Compensation

We account for stock-based compensation in accordance with accounting guidance that requires all stock-based compensation awards granted to employees and directors to be measured at fair value and recognized as an expense in the financial statements. As of December 31, 2019, we had $90.5 million of unrecognized compensation expense expected to be recognized over a weighted average period of 2.43 years. This unrecognized compensation expense does not include any expense related to performance-based restricted stock units and stock options for which the performance targets have not been deemed probable as of December 31, 2019.

The assumptions used in calculating the fair value of stock-based compensation awards represent management’s best estimates, but the estimates involve inherent uncertainties and the application of management judgment. In addition, compensation expense for performance-based awards is recorded over the related service period when achievement of the performance targets is deemed probable, which requires management judgment. ~~Refer to Note 2 and Note 13 to the Consolidated Financial Statements for a further discussion on stock-based compensation.~~

~~Recently Issued Accounting Standards~~Summary of Significant Account Policies

Refer to Note 2 ~~to the~~of our Consolidated Financial Statements, included in this Annual Report on Form 10-K, for a summary of our significant accounting policies and our assessment of recently issued accounting standards.

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~~ITEM 7A.~~			~~QUANTITATIVE AND QUALITATIVE DISCLOSURE~~ ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Foreign Currency and Interest Rate Risk

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

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We may elect to designate certain derivatives as hedging instruments under U.S. GAAP. We formally document all relationships between designated hedging instruments and hedged items, as well as our risk management objectives and strategies for undertaking hedged 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.

Our foreign exchange risk management program consists of designated cash flow hedges and undesignated hedges. As of ~~December~~March 31, ~~2019,~~2023, we had hedge instruments, primarily for British Pound/U.S. Dollar, U.S. Dollar/Chinese Renminbi, Euro/U.S. Dollar, U.S. Dollar/Canadian ~~Dollar, Euro/U.S.~~ Dollar, U.S. Dollar/Mexican Peso and U.S. Dollar/~~Japanese Yen~~South Korean Won currency pairs. All derivatives are recognized on the ~~consolidated balance sheets~~Consolidated Balance Sheets at fair value and classified based on the instruments maturity dates. The table below provides information about our foreign currency forward exchange agreements for the currencies listed above and presents the notional amounts and weighted average exchange rates by contractual maturity dates:


																	Fair Value as of Year Ended									Fiscal year ending March 31,												Fair Value as of
(In thousands)	(In thousands)				2020		2021		2022		2023		2024 and Thereafter		Total		December 31, 2019		December 31, 2018		(In thousands)			2024		2025		2026		2027		2028 and There-after		Total		March 31, 2023		March 31, 2022		December 31, 2021
On-Balance Sheet Financial Instruments	On-Balance Sheet Financial Instruments																																On-Balance Sheet Financial Instruments
USD Functional Currency	USD Functional Currency																				USD Functional Currency
EUR	EUR	Notional	$	83,749	$	21,709	$	—	$	—	$	—	$	105,458	$	182	$	2,360	EUR	Notional		$	91,046	$	22,218	$	—	$	—	$	—	$	113,264	$	(3,263)	$	2,238	$	4,447
		Weighted Average Exchange Rate	1.15		1.14								1.15							Weighted Average Exchange Rate		1.07		1.05								1.07
GBP	GBP	Notional	207,673		47,044		—		—		—		254,717		(3,504)		9,476		GBP	Notional		213,437		43,741		—		—		—		257,178		6,024		8,764		3,270
		Weighted Average Exchange Rate	1.31		1.31								1.31
JPY		Notional	30,564		7,070		—		—		—		37,634		198		33
		Weighted Average Exchange Rate	106.64		105.45								106.42							Weighted Average Exchange Rate		1.29		1.19								1.27
CNY Functional Currency	CNY Functional Currency																				CNY Functional Currency
USD	USD	Notional	186,011		29,300		—		—		—		215,311		531		—		USD	Notional		121,935		35,842		—		—		—		157,777		2,461		(7,691)		(6,090)
		Weighted Average Exchange Rate	6.97		7.14								6.99							Weighted Average Exchange Rate		6.65		6.75								6.67
CAD Functional Currency	CAD Functional Currency																				CAD Functional Currency
USD	USD	Notional	163,633		31,200		—		—		—		194,833		(2,421)		6,822		USD	Notional		71,318		32,491		—		—		—		103,809		3,538		(775)		(343)
		Weighted Average Exchange Rate	1.32		1.32								1.32							Weighted Average Exchange Rate		1.29		1.32								1.30
MXN Functional Currency	MXN Functional Currency																				MXN Functional Currency
USD	USD	Notional	58,276		13,550		—		—		—		71,826		(2,137)		812		USD	Notional		75,527		15,568		—		—		—		91,095		(15,271)		(2,917)		(237)
		Weighted Average Exchange Rate	20.18		20.79								20.29							Weighted Average Exchange Rate		22.00		22.58								22.10
KRW Functional Currency																			KRW Functional Currency
USD																			USD	Notional		25,561		16,714		—		—		—		42,275		646		(1,790)		—
																				Weighted Average Exchange Rate		1,234.64		1,310.96								1,264.82


~~ITEM 8.~~			~~FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA~~

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Report of Management on Internal Control Over Financial Reporting

Management is responsible for establishing and maintaining adequate internal control over financial reporting for the Company. We conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in 2013. This evaluation included review of the documentation of controls, evaluation of the design effectiveness of controls, testing of the operating effectiveness of controls and a conclusion on this evaluation. Based on our evaluation, we have concluded that our internal control over financial reporting was effective as of ~~December~~March 31, ~~2019.~~2023.

The effectiveness of our internal control over financial reporting as of ~~December~~March 31, ~~2019,~~2023, has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report which appears herein.


/s/ PSTEPHANIE C. LINNARTZ~~ATRIK~~ F~~RISK~~						President and Chief Executive Officer ~~and President~~
~~Patrik Frisk~~Stephanie C. Linnartz

/s/ D~~AVID~~DAVID E. BBERGMAN~~ERGMAN~~						Chief Financial Officer
David E. Bergman

Dated: May 24, 2023

~~Dated: February 26, 2020~~

5146

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Report of Independent Registered Public Accounting Firm

To the Board of Directors and Stockholders of Under Armour, Inc.:

Opinions on the Financial Statements and Internal Control over Financial Reporting

We have audited the accompanying consolidated balance sheets of Under Armour, Inc. and its subsidiaries~~(the~~ (the “Company”) as of March 31, 2023, March 31, 2022 and December 31, ~~2019 and 2018~~2021, and the related consolidated statements of operations, of comprehensive income (loss), ~~stockholders’~~of stockholders' equity and of cash flows for ~~each of~~the year ended March 31, 2023, for the three ~~years in~~months ended March 31, 2022 and for the ~~period~~years ended December 31, ~~2019,~~2021 and 2020, including the related notes and schedule of valuation and qualifying accounts for ~~each of~~the year ended March 31, 2023, for the three ~~years in~~months ended March 31, 2022 and for the ~~period~~years ended December 31, ~~2019~~2021 and 2020 listed in the index appearing under Item 15(a)(2) (collectively referred to as the “consolidated financial statements”).We also have audited the Company's internal control over financial reporting as of ~~December~~March 31, ~~2019,~~2023, based on criteria established in Internal Control - Integrated Framework(2013)issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of March 31, 2023, March 31, 2022 and December 31, ~~2019 and 2018,~~2021, and the results of its operations and its cash flows for ~~each of~~the year ended March 31, 2023, for the three ~~years in~~months ended March 31, 2022 and for the ~~period~~years ended December 31, ~~2019~~2021 and 2020 in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of ~~December~~March 31, ~~2019,~~2023, based on criteria established in Internal Control - Integrated Framework(2013)issued by the COSO.

~~Changes in Accounting Principles~~

As discussed in Note 2 to the consolidated financial statements, the Company changed the manner in which it accounts for its leases in 2019 and the manner in which it accounts for revenues from contracts with customers in 2018.

Basis for Opinions

The Company's management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Report of Management on Internal Control ~~Over~~over Financial Reporting. Our responsibility is to express opinions on the Company’s consolidatedfinancial statements and on the Company's internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.

Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidatedfinancial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

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Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed 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. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail,

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accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Critical Audit Matters

The critical audit ~~matters~~matter communicated below ~~are matters~~is a matter arising from the current period audit of the consolidated financial statements that ~~were~~was communicated or required to be communicated to the audit committee and that (i) ~~relate~~relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit ~~matters~~matter below, providing a separate ~~opinions~~opinion on the critical audit ~~matters~~matter or on the accounts or disclosures to which ~~they relate.~~

~~Goodwill Impairment Assessment – Latin America Reporting Unit~~

As described in Notes 2 and 5 to the consolidated financial statements, the Company’s consolidated goodwill balance was $550.2 million as of December 31, 2019, and the goodwill associated with the Latin America reporting unit was $46.7 million. Management conducts an impairment test at least annually in the fourth quarter or sooner if events or changes in circumstances indicate that it is more likely than not that the fair value of the reporting unit is less than its carrying amount. Management estimates fair value of the reporting unit using the discounted cash flow model under the income approach, which indicates the fair value of the reporting unit based on the present value of the cash flows that management expects the reporting unit to generate in the future. Management’s significant estimates in the discounted cash flows model include the Company's weighted average cost of capital, long-term rate of growth and profitability of the reporting unit’s business, and working capital effects. If the carrying amount of a reporting unit exceeds its fair value, goodwill is impaired to the extent that the carrying value exceeds the fair value of the reporting unit.

The principal considerations for our determination that performing procedures relating to the goodwill impairment assessment of the Latin America reporting unit is a critical audit matter are there was significant judgment by management when developing the fair value measurement of the reporting unit, which in turn led to a high degree of auditor judgment, effort, and subjectivity in performing procedures and evaluating significant assumptions, including the Company’s long-term rate of growth and profitability. In addition, the audit effort involved the use of professionals with specialized skill and knowledge to assist in performing these procedures and evaluating the audit evidence obtained.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to management’s goodwill impairment test, including controls over the valuation of the Company’s reporting units. These procedures also included, among others, testing management’s process for developing the fair value estimate; evaluating the appropriateness of the discounted cash flow model; testing the completeness, accuracy, and relevance of the underlying data used in the model; and evaluating the reasonableness of significant assumptions, including the long-term rate of growth and profitability. Evaluating management’s assumptions related to the long-term rate of growth and profitability involved evaluating management’s ability to execute on future growth strategies and evaluating whether the assumptions used were reasonable considering (i) the current and past performance of the reporting unit, (ii) the consistency with external market and industry data, and (iii) whether these

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assumptions were consistent with evidence obtained in other areas of the audit. Professionals with specialized skill and knowledge were used to assist in the evaluation of the Company’s discounted cash flow model and certain assumptions, including the Company’s weighted average cost of capital.

relates.

Reserve for Customer Returns

As described in Note 2 to the consolidated financial statements, the Company recorded ~~$219.4~~$160.5 million as of ~~December~~March 31, ~~2019~~2023 in reserves for returns, allowances, markdowns and discounts within customer refund liability. Management bases its estimates of the reserve for customer returns 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 principal considerations for our determination that performing procedures relating to the reserve for customer returns is a critical audit matter are ~~there was~~(i) the significant judgment by management in ~~estimating~~developing the estimate of reserve for customer returns, ~~reserve, which in turn led to~~and (ii) a high degree of auditor judgment, ~~effort,~~subjectivity, and ~~subjectivity~~effort in performing procedures and evaluating ~~the~~management’s significant ~~assumptions used in developing the estimate, including~~assumption related to the amount of outstanding returns that have not yet been received by the Company.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to management’s estimate of the ~~estimation of management’s~~reserve for customer returns, ~~reserve,~~ including the assumption related to the outstanding returns that have not yet been received by the Company. These procedures also included, among others, testing management’s process for developing the customer returns reserve; evaluating the appropriateness of the method; testing the completeness, accuracy, and relevance of underlying data used in the estimate; and evaluating the reasonableness of management’s significant ~~assumptions, including~~assumption related to the amount of outstanding returns that have not yet been received by the Company. Evaluating management’s significant assumption related to outstanding returns that have not yet been received by the Company involved evaluating whether the assumption used by management was reasonable considering (i) historical rates of customer ~~returns,~~returns; (ii) specific identification of outstanding ~~returns,~~returns; and (iii) whether these assumptions were consistent with evidence obtained in other areas of the audit.

/s/ PricewaterhouseCoopers LLP

Baltimore, Maryland

~~February 26, 2020~~May 24, 2023

We have served as the ~~Company’s~~Company's auditor since 2003.

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Under Armour, Inc. and Subsidiaries

Consolidated Balance Sheets

(In thousands, except share data)


	March 31, 2023		March 31, 2022		December 31, 2021
Assets
Current assets
Cash and cash equivalents	$	711,910	$	1,009,139	$	1,669,453
Accounts receivable, net (Note 3)	759,860		702,197		569,014
Inventories	1,190,253		824,455		811,410
Prepaid expenses and other current assets, net	297,563		297,034		286,422
Total current assets	2,959,586		2,832,825		3,336,299
Property and equipment, net (Note 4)	672,736		601,365		607,226
Operating lease right-of-use assets (Note 5)	489,306		420,397		448,364
Goodwill (Note 6)	481,992		491,508		495,215
Intangible assets, net (Note 7)	8,940		10,580		11,010
Deferred income taxes (Note 17)	186,167		20,141		17,812
Other long-term assets	58,356		76,016		75,470
Total assets	$	4,857,083	$	4,452,832	$	4,991,396
Liabilities and Stockholders' Equity
Current liabilities
Accounts payable	$	649,116	$	560,331	$	613,307
Accrued expenses	354,643		317,963		460,165
Customer refund liabilities (Note 11)	160,533		159,628		164,294
Operating lease liabilities (Note 5)	140,990		134,833		138,664
Other current liabilities	51,609		125,840		73,746
Total current liabilities	1,356,891		1,298,595		1,450,176
Long term debt, net of current maturities (Note 8)	674,478		672,286		662,531
Operating lease liabilities, non-current (Note 5)	705,713		668,983		703,111
Other long-term liabilities	121,598		84,014		86,584
Total liabilities	2,858,680		2,723,878		2,902,402
Stockholders' equity (Note 10)
Class A Common Stock, $0.0003 1/3 par value; 400,000,000 shares authorized as of March 31, 2023, March 31, 2022 and December 31, 2021; 188,704,689 shares issued and outstanding as of March 31, 2023 (March 31, 2022: 188,668,560 and December 31, 2021: 188,650,987)	63		63		63
Class B Convertible Common Stock, $0.0003 1/3 par value; 34,450,000 shares authorized, issued and outstanding as of March 31, 2023, March 31, 2022 and December 31, 2021	11		11		11
Class C Common Stock, $0.0003 1/3 par value; 400,000,000 shares authorized as of March 31, 2023, March 31, 2022 and December 31, 2021; 221,346,517 shares issued and outstanding as of March 31, 2023 (March 31, 2022: 238,472,217 and December 31, 2021: 253,161,064)	73		79		84
Additional paid-in capital	1,136,536		1,046,961		1,108,613
Retained earnings	929,562		721,926		1,027,833
Accumulated other comprehensive income (loss)	(67,842)		(40,086)		(47,610)
Total stockholders' equity	1,998,403		1,728,954		2,088,994
Total liabilities and stockholders' equity	$	4,857,083	$	4,452,832	$	4,991,396

December 31, 2019 December 31, 2018
Assets
Current assets
Cash and cash equivalents $ 788,072 $ 557,403
Accounts receivable, net 708,714 652,546
Inventories 892,258 1,019,496
Prepaid expenses and other current assets 313,165 364,183
Total current assets 2,702,209 2,593,628
Property and equipment, net 792,148 826,868
Operating lease right-of-use assets 591,931 —
Goodwill 550,178 546,494
Intangible assets, net 36,345 41,793
Deferred income taxes 82,379 112,420
Other long term assets 88,341 123,819
Total assets $ 4,843,531 $ 4,245,022
Liabilities and Stockholders’ Equity
Current liabilities
Accounts payable $ 618,194 $ 560,884
Accrued expenses 374,694 340,415
Customer refund liabilities 219,424 301,421
Operating lease liabilities 125,900 —
Current maturities of long term debt — 25,000
Other current liabilities 83,797 88,257
Total current liabilities 1,422,009 1,315,977
Long term debt, net of current maturities 592,687 703,834
Operating lease liabilities, non-current 580,635 —
Other long term liabilities 98,113 208,340
Total liabilities 2,693,444 2,228,151
Commitments and contingencies (see Note 8)
Stockholders’ equity
Class A Common Stock, $0.0003 1/3 par value; 400,000,000 shares authorized as of December 31, 2019 and 2018; 188,289,680 shares issued and outstanding as of December 31, 2019, and 187,710,319 shares issued and outstanding as of December 31, 2018. 62 62
Class B Convertible Common Stock, $0.0003 1/3 par value; 34,450,000 shares authorized, issued and outstanding as of December 31, 2019 and 2018. 11 11
Class C Common Stock, $0.0003 1/3 par value; 400,000,000 shares authorized as of December 31, 2019 and 2018; 229,027,730 shares issued and outstanding as of December 31, 2019, and 226,421,963 shares issued and outstanding as of December 31, 2018. 76 75
Additional paid-in capital 973,717 916,628
Retained earnings 1,226,986 1,139,082
Accumulated other comprehensive loss (50,765) (38,987)
Total stockholders’ equity 2,150,087 2,016,871
Total liabilities and stockholders’ equity $ 4,843,531 $ 4,245,022
Commitments and Contingencies (Note 9)

Related Party Transactions (Note 20)

See accompanying notes.

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Under Armour, Inc. and Subsidiaries

Consolidated Statements of Operations

(In thousands, except per share amounts)


		Year Ended December 31,
		2019		2018		2017			Year Ended March 31, 2023		Three Months Ended March 31, 2022 (Transition Period)		Year Ended December 31, 2021		Year Ended December 31, 2020
Net revenues	Net revenues	$	5,267,132	$	5,193,185	$	4,989,244	Net revenues	$	5,903,636	$	1,300,945	$	5,683,466	$	4,474,667
Cost of goods sold	Cost of goods sold	2,796,599		2,852,714		2,737,830		Cost of goods sold	3,254,296		695,781		2,821,967		2,314,572
Gross profit	Gross profit	2,470,533		2,340,471		2,251,414		Gross profit	2,649,340		605,164		2,861,499		2,160,095
Selling, general and administrative expenses	Selling, general and administrative expenses	2,233,763		2,182,339		2,099,522		Selling, general and administrative expenses	2,365,529		594,446		2,334,691		2,171,934
Restructuring and impairment charges	Restructuring and impairment charges	—		183,149		124,049		Restructuring and impairment charges	—		56,674		40,518		601,599
Income (loss) from operations	Income (loss) from operations	236,770		(25,017)		27,843		Income (loss) from operations	283,811		(45,956)		486,290		(613,438)
Interest expense, net		(21,240)		(33,568)		(34,538)
Other expense, net		(5,688)		(9,203)		(3,614)
Interest income (expense), net								Interest income (expense), net	(12,826)		(6,154)		(44,300)		(47,259)
Other income (expense), net								Other income (expense), net	16,780		(51)		(51,113)		168,153
Income (loss) before income taxes	Income (loss) before income taxes	209,842		(67,788)		(10,309)		Income (loss) before income taxes	287,765		(52,161)		390,877		(492,544)
Income tax expense (benefit)	Income tax expense (benefit)	70,024		(20,552)		37,951		Income tax expense (benefit)	(101,046)		8,181		32,072		49,387
Income (loss) from equity method investment		(47,679)		934		—
Income (loss) from equity method investments								Income (loss) from equity method investments	(2,042)		732		1,255		(7,246)
Net income (loss)	Net income (loss)	$	92,139	$	(46,302)	$	(48,260)	Net income (loss)	$	386,769	$	(59,610)	$	360,060	$	(549,177)

Basic net income (loss) per share of Class A, B and C common stock		$	0.20	$	(0.10)	$	(0.11)
Diluted net income (loss) per share of Class A, B and C common stock		$	0.20	$	(0.10)	$	(0.11)
Basic net income (loss) per share of Class A, B and C common stock (Note 18)								Basic net income (loss) per share of Class A, B and C common stock (Note 18)	$	0.86	$	(0.13)	$	0.77	$	(1.21)
Diluted net income (loss) per share of Class A, B and C common stock (Note 18)								Diluted net income (loss) per share of Class A, B and C common stock (Note 18)	$	0.84	$	(0.13)	$	0.77	$	(1.21)

Weighted average common shares outstanding Class A, B and C common stock	Weighted average common shares outstanding Class A, B and C common stock							Weighted average common shares outstanding Class A, B and C common stock
Basic	Basic	450,964		445,815		440,729		Basic	451,426		471,425		465,504		454,089
Diluted	Diluted	454,274		445,815		440,729		Diluted	461,509		471,425		468,644		454,089

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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, ~~PNC Bank, National Association, as syndication agent~~ and the other lenders and arrangers party thereto (the "credit agreement")~~, amending~~. In May 2020, May 2021 and ~~restating~~December 2021, the ~~Company's prior~~Company entered into the first, second and third amendments to the credit ~~agreement.~~agreement, respectively (the credit agreement as amended, the "amended credit agreement" or the "revolving credit facility"). The amended credit agreement provides for revolving credit commitments of $1.1 billion and has a term ~~of five years, maturing in March 2024,~~that ends on December 3, 2026, with permitted extensions under certain ~~circumstances, and provides revolving credit commitments of up to $1.25 billion of borrowings, but no term loan borrowings, which were provided for under the prior credit agreement.~~circumstances. As of March 31, 2023, March 31, 2022 and December 31, ~~2019,~~2021, there were 0no amounts outstanding under the revolving credit ~~facility or the term loan. As of December 31, 2018, there were 0 amounts outstanding under the revolving credit facility and $136.3 million outstanding under the term loan.~~facility.

At the Company's request and ~~the~~a lender's consent, ~~revolving and or term loan borrowings~~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, as amended.~~agreement. Incremental borrowings are uncommitted and the availability thereof will depend on market conditions at the time the Company seeks to incur such borrowings.

~~The 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. ~~There~~As of March 31, 2023, there were ~~$5.0~~$4.4 million of letters of credit outstanding ~~as of~~(March 31, 2022: $4.5 million; December 31, ~~2019.~~2021: $4.3 million).

The obligations of the Company under the amended credit agreement are guaranteed by certain domestic significant subsidiaries of Under Armour, Inc., subject to customary exceptions (the "subsidiary guarantors") and primarily secured by a first-priority security interest in substantially all of the assets of Under Armour, Inc. and the subsidiary guarantors, excluding real property, capital stock in and debt of subsidiaries of Under Armour, Inc. holding certain real property and other customary exceptions. The amended credit agreement provides for the permanent fall away of guarantees and collateral upon the Company's achievement of investment grade rating from two rating agencies.

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

The Company is also required to maintain a ratio of consolidated EBITDA, ~~as defined in the credit agreement,~~ to consolidated interest expense of not less than 3.50 to ~~1.00~~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 ~~1.00 ("consolidated leverage ratio"~~1.0 (the "leverage covenant")., as described in more detail in the amended credit agreement. As of ~~December~~March 31, ~~2019,~~2023, the Company was in compliance with ~~these ratios.~~ the applicable covenants.

The amended credit agreement implements SOFR as the replacement of LIBOR as a benchmark interest rate for U.S. dollar borrowings (and analogous benchmark rate replacements for borrowings in Yen, Canadian dollars, Pound Sterling and Euro). Borrowings under the amended credit agreement bear interest at a rate per annum equal to, at the ~~Company’s~~Company's option, either (a) an alternate base rate or(for borrowings in U.S. dollars), (b) a term rate ~~based on the rates applicable for deposits~~(for borrowings in ~~the interbank market for~~ U.S. ~~Dollars~~dollars, Euro, Japanese Yen or ~~the applicable currency~~Canadian dollars) or (c) a "risk free" rate (for borrowings in ~~which the loans are made (“adjusted LIBOR”)~~U.S. dollars or Pounds Sterling), plus in each case an applicable margin. The applicable margin for loans will be adjusted by reference to a grid (the ~~“Pricing Grid”~~"pricing grid") based on the ~~consolidated~~ leverage ratio of consolidated total indebtedness to consolidated EBITDA and ranges between 1.00% to ~~1.25% for adjusted LIBOR~~1.75% (or, in the case of alternate base loans, ~~and~~ 0.00% to 0.25% for alternate base rate loans. The weighted average interest rate under the outstanding term loan was 3.2% during the year ended December 31, 2018. During the year ended December 31, 2019, there were 0 borrowings under the outstanding term loan. The weighted average interest rate under the revolving credit facility borrowings was 3.6% and 3.0% during the years ended December 31, 2019 and 2018, respectively.0.75%). The Company ~~pays~~will also pay a commitment fee determined in accordance with the pricing grid on the average daily unused amount of the revolving credit facility and certain fees with respect to letters of credit. As of ~~December~~March 31, ~~2019,~~2023, the commitment fee was 1517.5 basis points. ~~Since inception,~~

1.50% Convertible Senior Notes

In May 2020, the Company ~~incurred~~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 fixed rate of 1.50% per annum, payable semiannually in arrears on June 1 and ~~deferred $3.4~~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

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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) were $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.

During Fiscal 2021, the Company entered into exchange agreements with certain holders of the Convertible Senior Notes, who agreed to exchange approximately $419.1 million in ~~financing costs~~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 "Exchanges"). In connection with the Exchanges, the Company paid approximately $507.0 million cash and issued approximately 18.8 million shares of the Company's Class C Common Stock to the exchanging holders. Additionally, the Company recognized losses on debt extinguishment of $58.5 million during Fiscal 2021, within Other Income (Expense), net on the Company's Consolidated Statements of Operations. Following the Exchanges, approximately $80.9 million aggregate principal amount of the Convertible Senior Notes remain outstanding as of March 31, 2023.

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.

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

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

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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.

During Fiscal 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 $91.7 million in connection with such termination agreements related to the ~~credit agreement.~~Exchanges.

~~Table~~The Convertible Senior Notes contain a cash conversion feature. Prior to the adoption of ~~Contents~~ASU 2020-06, the Company had 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 was 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.

The Company adopted ASU 2020-06 on January 1, 2022 using the modified retrospective method. As a result, the Convertible Senior Notes are no longer accounted for as separate liability and equity components, but rather a single liability. See Note 2 to the Condensed Consolidated Financial Statements included in Part I of the Company's Transition Report of Form 10-QT for the three months ended March 31, 2022 for more details.

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 ~~“Notes”~~"Senior Notes"). The ~~proceeds were used to pay down amounts outstanding under~~Senior Notes bear interest at the ~~revolving credit facility. Interest is~~fixed rate of 3.250% per annum, 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), the~~The Company 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 Notes to be redeemed or a “make-whole” amount applicable to such Notes as~~prices described in the indenture governing the Notes, plus accrued and unpaid interest to, but excluding, the redemption date. On or after March 15, 2026 (three months prior to the maturity date of the Notes), the Company may redeem some or all of the Notes at any time or from time to time at a redemption price equal to 100% of the principal amount of the Notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date.

Senior Notes. The indenture governing the Senior Notes contains negative covenants ~~including limitations~~ that ~~restrict~~limit the ~~Company’s~~Company's ability ~~and the ability of~~to engage in certain ~~of its subsidiaries to create or incur secured indebtedness and enter into sale and leaseback~~ transactions and ~~the Company’s ability to consolidate, merge or transfer all or substantially all of its properties or assets to another person, in each case~~are subject to material exceptions described in the indenture. The Company incurred and deferred ~~$5.3~~$5.4 million in financing costs in connection with the Senior Notes.

~~Other Long Term Debt~~

In December 2012, the Company entered into a $50.0 million recourse loan collateralized by the land, buildings and tenant improvements comprising the Company's corporate headquarters. In July 2018, this loan was paid in full, without penalties, using borrowings under the Company's revolving credit facility.

~~The following are the scheduled maturities of long term debt as of December 31, 2019:~~


~~(In thousands)~~
~~2020~~	$	—
~~2021~~	—
~~2022~~	—
~~2023~~	—
~~2024~~	—
~~2025 and thereafter~~	~~600,000~~
~~Total scheduled maturities of long term debt~~	$	~~600,000~~

~~Current maturities of long term debt~~	$	—

Interest Expense

Interest expense ~~net was $21.2 million, $33.6 million, and $34.5 million for the years ended December 31, 2019, 2018 and 2017, respectively. Interest expense~~ includes ~~the~~ 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. ~~Amortization of deferred financing costs~~Interest expense, net was ~~$2.4 million, $1.5 million, and $1.3~~$12.8 million for Fiscal 2023 (Fiscal 2021: $44.3 million; Fiscal 2020: $47.3 million; Transition Period: $6.2 million).

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Maturity of Long Term Debt

The following are the ~~years ended December~~scheduled maturities of long term debt as of March 31, ~~2019, 2018 and 2017, respectively.~~2023:


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

Current maturities of long term debt	$	—

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.

~~8. Commitments and Contingencies~~NOTE 9. COMMITMENTS AND CONTINGENCIES

Sports Marketing and Other Commitments

Within the normal course of business, the Company enters into contractual commitments in order to promote the Company’s brand and products. These commitments include sponsorship agreements with teams and athletes on the collegiate and professional levels, official supplier agreements, athletic event sponsorships and other marketing commitments. The following is a schedule of the Company’s future minimum payments under its sponsorship and other marketing agreements as of ~~December~~March 31, ~~2019, as well as significant sponsorship and other marketing agreements entered into during the period after December 31, 2019 through the date of this report:~~

~~Table of Contents~~2023:

(In thousands)
2020 $ 131,297
2021 114,407
2022 105,255
2023 99,260
2024 87,536
2025 and thereafter 141,354
Total future minimum sponsorship and other payments $ 679,109


Fiscal year ending March 31,
2024	$	83,342
2025	142,396
2026	47,362
2027	23,867
2028	16,708
2029 and thereafter	98,750
Total future minimum sponsorship and other payments	$	412,425

The amounts listed above are the minimum compensation obligations and guaranteed royalty fees required to be paid under the Company’s sponsorship and other marketing agreements. The amounts listed above do not include additional performance incentives and product supply obligations provided under ~~certain~~the agreements. It is not possible to determine how much the Company will spend on product supply obligations on an annual basis as contracts generally do not stipulate specific cash amounts to be spent on products. The amount of product provided to the sponsorships depends on many factors including general playing conditions, the number of sporting events in which they participate and the Company’s decisions regarding product and marketing initiatives. In addition, the costs to design, develop, source and purchase the products furnished to the endorsers are incurred over a period of time and are not necessarily tracked separately from similar costs incurred for products sold to customers.

Other

In connection with various contracts and agreements, the Company has agreed to indemnify counterparties against certain third party claims relating to the infringement of intellectual property rights and other items. Generally, such indemnification obligations do not apply in situations in which the counterparties are grossly negligent, engage in willful misconduct, or act in bad faith. Based on the Company’s historical experience and the estimated probability of future loss, the Company has determined that the fair value of such indemnifications is not material to its consolidated financial position or results of operations.

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~~business. However, the ~~ultimate resolution~~matters described below, if decided adversely to or settled by

Table of ~~any such proceedings will not have~~Contents

the Company, could result, individually or in the aggregate, in a liability material ~~adverse effect on its~~to the Company's consolidated financial position, results of operations or cash flows.

In re Under Armour Securities Litigation

On March 23, 2017, 3three separate securities cases previously filed against the Company in the United States District Court for the District of Maryland (the ~~“District Court”~~"District Court") were consolidated under the caption In re Under Armour Securities Litigation,, Case No. 17-cv-00388-RDB (the ~~“Consolidated Action”~~"Consolidated Securities Action"). On ~~August 4, 2017,~~November 6 and December 17, 2019, two additional putative securities class actions were filed in the ~~lead plaintiff~~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). On September 14, 2020, the District Court issued an order that, among other things, consolidated the Patel and Waronker cases into the Consolidated Securities Action.

The operative complaint (the Third Amended Complaint or the "TAC") in the Consolidated Securities Action, ~~North East Scotland Pension Fund, joined by named plaintiff Bucks CountyEmployees Retirement Fund,~~was filed ~~a consolidated amended complaint (the “Amended Complaint”) against the Company, the Company’s then-Chief Executive Officer, Kevin Plank,~~on October 14, 2020. The TAC asserts claims under Sections 10(b) and ~~former Chief Financial Officers Lawrence Molloy and Brad Dickerson. The Amended Complaint alleges violations of Section 10(b) (and Rule 10b-5)~~20(a) of the Securities Exchange Act of 1934, as amended (the ~~“Exchange Act”~~"Exchange Act"), against the Company and Mr. Plank and under Section ~~20(a) control person liability under~~20A of the Exchange Act against ~~the officers named in the Amended Complaint, claiming~~Mr. Plank. The TAC alleges that the defendants ~~made material misstatements~~supposedly concealed purportedly declining consumer demand for certain of the Company's products between the third quarter of 2015 and ~~omissions~~the fourth quarter of 2016 by making allegedly false and misleading statements regarding the Company's performance and future prospects and by engaging in undisclosed and allegedly improper sales and accounting practices, including shifting sales between quarterly periods allegedly to appear healthier. The TAC also alleges that the defendants purportedly failed to disclose that the Company was under investigation by and cooperating with the U.S. Department of Justice ("DOJ") and the U.S. Securities and Exchange Commission (the "SEC") since July 2017. The class period identified in the TAC is September 16, 2015 through November 1, 2019.

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. On December 1, 2021, the plaintiffs filed a motion seeking, among other things, certification of the class they are seeking to represent in the Consolidated Securities Action. On September 29, 2022, the court granted the plaintiffs' class certification motion.

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

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

On March 29, 2019, the court in the ~~Amended Complaint is September 16, 2015 through January 30, 2017. The Amended Complaint also asserts~~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 ~~under Sections 11 and 15~~to those asserted in the Kenney action relating to the Company's purchase of parcels in the Baltimore Peninsula, an area of Baltimore previously referred to as Port Covington (which derivative action has since been dismissed in its entirety).

Prior to the filing of the ~~Securities Act~~derivative complaints in Kenney v. Plank, et al. and Luger v. Plank, et al., both of ~~1933, as amended (the “Securities Act”), in connection with~~ the ~~Company’s public offering~~purported stockholders had sent the Company's Board of ~~senior unsecured notes in June 2016. The Securities Act claims are asserted against~~Directors a letter demanding that the Company pursue claims similar to the ~~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~~claims asserted in the ~~offering. The Amended Complaint alleges~~derivative complaints. Following an investigation, a majority of

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disinterested and independent directors of the Company determined 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,~~claims should not be pursued by the Company and both of these purported stockholders were informed of that determination.

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

Prior to the ~~other defendants filed motions to dismiss~~filing of the ~~Amended Complaint. On September 19, 2018,~~derivative complaints in these two actions, neither of the ~~District Court dismissed~~purported stockholders made a demand that the ~~Securities Act~~Company's Board of Directors pursue the claims with prejudice and the Exchange Act claims without prejudice. The lead plaintiff 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.

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~~In September 2019, plaintiffs filed an appeal~~asserted in the ~~United States Court of Appeals for~~complaints. In October 2021, the ~~Fourth Circuit challenging~~court issued an order (i) consolidating the ~~decisions by the District Court on September 19, 2018~~Cordell and August 19, 2019 (the “Appeal”). The Appeal was fully briefed as of January 16, 2020. On November 18, 2019, before briefing on the Appeal was complete, the lead plaintiff 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 the lead plaintiff to relief from the District Court’s final judgment. On January 22, 2020, the District Court granted the Rule 62.1 motion and indicated that it would grant a motion for relief from the final judgment and provide the lead plaintiffSalo actions with the ~~opportunity to file~~consolidated Kenney action into a ~~third amended complaint if~~single consolidated derivative action (the "Consolidated State Derivative Action"); (ii) designating the ~~Fourth Circuit remands for that purpose. The District Court further stated that it would, upon remand, consolidate the matter with~~ ~~Patel v. Under Armour, Inc.~~ ~~and~~ ~~Waronker v. Under Armour Inc., described below, and appoint the lead plaintiff of~~ ~~In re Under Armour Securities Litigation~~Kenney action as the lead ~~plaintiff over~~case; and (iii) specifying that the ~~consolidated cases.~~scheduling order in the Kenney action shall control the Consolidated State Derivative Action.

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

~~Patel v. Under Armour, Inc.~~ ~~and~~ ~~Waronker v. Under Armour, Inc.~~

On November 6, 2019, a purported shareholder of the Company filed a securities case in the United States District Court for the District of Maryland against the Company and the Company’s then-Chief Executive Officer, Kevin Plank, Chief Financial Officer, David Bergman, and then-Chief Operating Officer, Patrik Frisk, as well as former Chief Financial Officer, Lawrence Molloy (captioned ~~Patel v. Under Armour, Inc~~., No 1:19-cv-03209-RDB). The complaint alleges 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 complaint. The complaint claims 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 and the United States Securities and Exchange Commission since July 2017. The class period identified in the complaint is August 3, 2016 through November 1, 2019, inclusive.

On December 17, 2019, a purported shareholder of the Company filed a securities case in the United States District Court for the District of Maryland against the Company and Mr. Plank, Mr. Bergman and Mr. Frisk, as well as two former Chief Financial Officers of the Company (captioned ~~Waronker v. Under Armour, Inc., No. 1:19-cv-03581-RDB). Like the~~ ~~Patel~~ ~~complaint, the~~ ~~Waronker~~ complaint alleges 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 complaint. The complaint claims 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 and the United States Securities and Exchange Commission since July 2017. The class period identified in the complaint is September 16, 2015 through November 1, 2019, inclusive.

The Court has not consolidated these cases or appointed a lead plaintiff and the Company has no pending deadline to respond to the complaint in either of these actions. As described above, the Court indicated in a January 22, 2020 decision in the ~~In re Under Armour Securities Litigation~~ ~~case that it anticipated consolidating that matter with these cases and appointing the lead plaintiff in~~ ~~In re Under Armour Securities Litigation~~ ~~as the lead plaintiff over the consolidated cases, in the event that the Fourth Circuit remands the~~ ~~In re Under Armour Securities Litigation~~ ~~case.~~

The Company believes that the claims are without merit and intends to defend the lawsuits 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 these matters.

~~Olin Derivative Complaint~~

~~On December 26, 2019, Dale Olin, a purported shareholder of the Company, filed a shareholder derivative lawsuit in state court in Baltimore, Maryland, captioned~~ ~~Olin v. Under Armour, Inc.~~, ~~et al.~~, No. 24-C-19-006850 (Md. Cir. Ct.). The complaint was brought against Mr. Plank, Mr. Bergman and Mr. Frisk, and certain other members of the Company’s Board of Directors and names the Company as a nominal defendant. The complaint alleges that the defendants breached their fiduciary duties between August 2016 and November 2019 by (i) failing to disclose or take appropriate action regarding alleged shifting of sales between quarterly periods to appear healthier, (ii) failing

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to “adhere to accepted accounting principles regarding revenue recognition, which resulted in materially false and misleading public statements by the Company,” (iii) failing to disclose that the Company was under investigation by and cooperating with the United States Department of Justice and the United States Securities and Exchange Commission, and (iv) exposing the Company to the aforementioned investigations and to a securities fraud class action. The Company has not yet responded to the complaint. On February 5, 2020, the parties filed a joint motion for assignment of the action to the Business & Technology Case Management Program and a stipulation setting forth a deadline of March 12, 2020 for the Company to respond to the complaint.

~~Prior to the filing of the derivative complaint in~~ ~~Olin v. Under Armour, Inc.~~, ~~et al., the purported stockholder did not make a demand that the Company pursue claims similar to the claims asserted in the complaint.~~

~~The Company believes that the claims 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.

~~Sagamore~~Federal Court Derivative Complaints

~~In April 2018, two purported stockholders filed~~On January 27, 2021, the District Court entered an order consolidating for all purposes four separate stockholder derivative ~~complaints~~cases that previously had been filed in the United States District Court for the District of Maryland. These were brought against Mr. Plank and certain other members of the Company’s Board of Directors and name the Company as a nominal defendant. The complaints make allegations related to the Company’s purchase of certain parcels of land from entities controlled by Mr. Plank (through Sagamore Development Company, LLC (“Sagamore”)), as well as other related party transactions.

Sagamore purchased these 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 20, 2019, these cases were consolidated under the caption~~ ~~In re Under Armour, Inc. Shareholder Derivative Litigation~~ ~~and a lead plaintiff was appointed by~~ the court. On ~~May 1, 2019,~~February 2, 2023, the District Court issued an order appointing Balraj Paul and Anthony Viskovich as lead ~~plaintiff filed a consolidated derivative complaint asserting that Mr. Plank~~plaintiffs (“Derivative Lead Plaintiffs”), appointing counsel for the Derivative Lead Plaintiffs as lead counsel, and the director defendants breached their fiduciary duties in connection with the purchase of the parcels and other related party transactions and that Sagamore aided and abetted the alleged breaches of fiduciary duty by the other defendants in connection with Sagamore’s alleged role in the sale of the parcels to the Company. The consolidated complaint also asserts an unjust enrichment claim against Mr. Plank and Sagamore. It seeks damages on behalf of the Company and certain corporate governance related actions. The Company and the defendants filed a motion to dismissrecaptioning the consolidated ~~complaint on July 2, 2019, which was fully briefed~~case as ~~of October 17, 2019 and is currently pending.~~

~~In June and July 2018, 3 additional purported stockholder derivative complaints were filed. Two of the complaints were filed in Maryland state court (in cases captioned~~ ~~Kenney~~Paul et al. v. Plank et al. ~~(filed June 29, 2018) and~~ ~~Luger v. Plank, et al.~~ ~~(filed July 26, 2018), respectively), and those cases were consolidated on October 19, 2018 under the caption~~ ~~Kenney v. Plank, et. al.~~ ~~The other complaint was filed in the United States District~~ (the “Federal Court ~~for the District of Maryland (in a case captioned~~ ~~Andersen v. Plank et al.~~ ~~(filed July 23, 2018)~~Derivative Action”). ~~The operative~~Prior to their filing derivative complaints, ~~in these cases name Mr. Plank, certain other members~~both of the ~~Company’s Board of Directors and certain former Company executives as defendants, and name the Company as a nominal defendant. The operative complaints include allegations similar to those in the~~ ~~In re Under Armour Securities Litigation~~ matter discussed above that challenges, 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 operative complaints in each of these cases assert breach of fiduciary duty and unjust enrichment claims against the individual defendants. The operative complaint in the ~~Kenney~~ ~~matter also makes allegations similar to those in the consolidated complaint in the~~ ~~In re Under Armour, Inc. Shareholder~~ Derivative ~~Litigation~~ matter discussed above regarding the Company’s purchase of parcels from entities controlled by Mr. Plank through Sagamore and asserts a claim of corporate waste against the individual defendants. These complaints seek similar remedies to the remedies sought in the ~~In re Under Armour, Inc. Shareholder Derivative Litigation~~ ~~complaint.~~

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~~The~~ ~~Andersen~~ ~~action was stayed between December 2018 and August 2019 pursuant to a court order. In September 2019, pursuant to an agreement between the parties, the court in the~~ ~~Andersen~~ ~~action entered an order staying that case pending the resolution of the Appeal in~~ ~~In re Under Armour Securities Litigation. 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~~ ~~In re Under Armour Securities Litigation~~ ~~and the~~ ~~In re Under Armour, Inc. Shareholder Derivative Litigation~~ ~~matters.~~

~~Prior to the filing of the derivative complaints in~~ ~~In re Under Armour, Inc. Shareholder Derivative Litigation~~, ~~Kenney v. Plank, et al.~~, ~~Luger v. Plank, et al., and~~ ~~Andersen v. Plank et al., each of the purported stockholders~~Lead Plaintiffs had sent the ~~Company~~Company's Board of Directors a letter demanding that the Company pursue claims similar to the claims asserted in the derivative complaints. Following an investigation, a majority of disinterested and independent directors of the Company determined that the claims should not be pursued by the Company, and the Derivative Lead Plaintiffs were informed ~~each of these purported stockholders~~ of that determination.

On March 16, 2023, the District Court issued an order granting a motion for voluntary dismissal without prejudice that had been filed by the plaintiff in one of the four derivative cases who had not been appointed as a lead plaintiff. The other three consolidated derivative cases remain pending as part of the Federal Court Derivative Action.

On April 24, 2023, the Derivative Lead Plaintiffs designated an operative complaint in the Federal Court Derivative Action. The operative complaint 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. It asserts 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; and (iv) the Company's supposed failure to timely disclose investigations by the SEC and DOJ. The operative complaint asserts breach of fiduciary duty and unjust enrichment claims against the defendants, and asserts a contribution claim under the federal securities laws against certain defendants. It seeks damages on behalf of the Company and certain corporate governance related actions. The deadline for the Company and the defendants to respond to the operative complaint is June 23, 2023.

The Company believes that the claims asserted in the ~~derivative complaints~~Federal Court Derivative Action are without merit and intends to defend ~~these matters~~this matter vigorously. However, because of the inherent uncertainty as to the outcome of ~~these proceedings,~~this proceeding, the Company is unable at this time to estimate the possible impact of the outcome of ~~these matters.~~this matter.

~~Data Incident~~Contingencies

In ~~2018, an unauthorized third party acquired data associated~~accordance with Accounting Standards Codification (“ASC”) Topic 450 “Contingencies” (“Topic 450”), the ~~Company's Connected Fitness users' accounts~~Company establishes accruals for contingencies when (i) the ~~Company's MyFitnessPal application~~Company believes it is probable that a loss will be incurred and ~~website. The~~(ii) the amount of the loss can be reasonably estimated. If the reasonable estimate is a range, the Company will accrue the best estimate in that range; where no best estimate can be determined, the Company will accrue the minimum. As of March 31, 2023, the Company has ~~faced consumer class action lawsuits associated~~estimated its liability and recorded $20 million in respect of certain ongoing legal proceedings summarized above.The timing of the resolution is unknown and the amount of loss ultimately incurred in connection with ~~this incident and has received inquiries regarding the incident from certain government regulators and agencies. The Company does not currently consider~~ these matters may be substantially higher or lower than the amount accrued for these matters, and the Company expects a portion of the loss, if any is incurred, to be ~~material and believes its insurance coverage will provide coverage should any significant expense arise.~~covered

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by the Company’s insurance. Legal proceedings for which no accrual has been established are disclosed to the extent required by ASC 450.

In addition, in connection with the matters described above and previously disclosed government investigations, the Company provided notice of claims under multiple director and officer liability insurance policy periods. With respect to one policy period, a lawsuit was filed against the Company by certain of its insurance carriers seeking a declaration that no further amounts will be payable with respect to that policy period and with respect to one carrier, reimbursement for $10 million in defense and investigation costs previously paid to the Company. On April 26, 2023, the Company and one of its insurance carriers resolved the dispute related to that carrier’s claims for a declaration that no further amounts would be payable and seeking reimbursement of previously paid amounts. The resolution resulted in no reimbursement payable by the Company. The other carriers remaining in the case continue to seek a declaration that no further amounts will be payable with respect to that policy period. The timing of the resolution is unknown for the remaining claims in this matter.

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

~~9. Stockholders’ Equity~~NOTE 10. STOCKHOLDERS' EQUITY

The ~~Company’s~~Company's Class A Common Stock and Class B Convertible Common Stock have an authorized number of ~~shares at December 31, 2019 of~~ 400.0 million shares and ~~34.5~~34.45 million shares, respectively, and each have a par value of $0.0003 1/3 per ~~share.~~share as of March 31, 2023. Holders of Class A Common Stock and Class B Convertible Common Stock have identical rights, including liquidation preferences, except that the holders of Class A Common Stock are entitled to 1one vote per share and holders of Class B Convertible Common Stock are entitled to 10 votes per share on all matters submitted to a stockholder vote. Class B Convertible Common Stock may only be held by Kevin Plank, the ~~Company’s~~Company's founder, Executive ~~Chairman~~Chair and Brand Chief, or a related party of Mr. Plank, as defined in the ~~Company’s~~Company's charter. As a result, Mr. Plank has a majority voting control over the Company. Upon the transfer of shares of Class B Convertible Stock to a person other than Mr. Plank or a related party of Mr. Plank, the shares automatically convert into shares of Class A Common Stock on a one-for-one basis. In addition, all of the outstanding shares of Class B Convertible Common Stock will automatically convert into shares of Class A Common Stock on a one-for-one basis upon the death or disability of Mr. Plank or on the record date for any ~~stockholders’~~stockholders' meeting upon which the shares of Class A Common Stock and Class B Convertible Common Stock beneficially owned by Mr. Plank is less than 15% of the total shares of Class A Common Stock and Class B Convertible Common Stock outstanding or upon the other events specified in the Class C Articles Supplementary to the Company's charter as documented below. Holders of the ~~Company’s~~Company's common stock are entitled to receive dividends when and if authorized and declared out of assets legally available for the payment of dividends.

The Company's Class C Common Stock has an authorized number of ~~shares at December 31, 2019 of~~ 400.0 million shares and ~~have~~has a par value of $0.0003 1/3 per ~~share.~~share as of March 31, 2023. The terms of the Class C ~~common stock~~Common Stock are substantially identical to those of the Company's Class A ~~common stock,~~Common Stock, except that the Class C ~~common stock~~Common Stock has no voting rights (except in limited circumstances), will automatically convert into Class A ~~common stock~~Common Stock under certain circumstances and includes provisions intended to ensure equal treatment of Class C ~~common stock~~Common Stock and Class B ~~common stock~~Common Stock in certain corporate transactions, such as mergers, consolidations, statutory share exchanges, conversions or negotiated tender offers, and including consideration incidental to these transactions.

Share Repurchase Program

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

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Pursuant to the previously disclosed accelerated share repurchase transactions that the Company entered into in February 2022, May 2022, August 2022 and November 2022 (the "ASR Agreements"), the Company repurchased 18.7 million and 16.2 million shares of Class C Common Stock, which were immediately retired, during Fiscal 2023 and the Transition Period, respectively. As a result, $174.0 million was recorded to retained earnings to reflect the difference between the market price of the Class C Common Stock repurchased and its par value during Fiscal 2023 (Transition Period: $240.0 million).

As of the date of this Annual Report on Form 10-K, the Company has repurchased a total of $425 million or 34.9 million outstanding shares of its Class C Common Stock under its share repurchase program.

~~10. Fair Value Measurements~~NOTE 11. REVENUES

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


	Year Ended March 31, 2023		Three Months Ended March 31, 2022 (Transition Period)		Year Ended December 31, 2021		Year Ended December 31, 2020

Apparel	$	3,871,638	$	876,604	$	3,841,249	$	2,882,562
Footwear	1,455,265		296,696		1,264,127		934,333
Accessories	408,521		96,803		461,894		414,082
Net Sales	5,735,424		1,270,103		5,567,270		4,230,977
License revenues	116,746		26,602		112,623		105,779
Corporate Other	51,466		4,240		3,573		137,911
Total net revenues	$	5,903,636	$	1,300,945	$	5,683,466	$	4,474,667


	Year Ended March 31, 2023		Three Months Ended March 31, 2022 (Transition Period)		Year Ended December 31, 2021		Year Ended December 31, 2020

Wholesale	$	3,468,126	$	829,179	$	3,245,749	$	2,383,353
Direct-to-consumer	2,267,298		440,924		2,321,521		1,847,624
Net Sales	5,735,424		1,270,103		5,567,270		4,230,977
License revenues	116,746		26,602		112,623		105,779

Corporate Other	51,466		4,240		3,573		137,911
Total net revenues	$	5,903,636	$	1,300,945	$	5,683,466	$	4,474,667

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


	As of March 31, 2023		As of March 31, 2022		As of December 31, 2021
Customer refund liability	$	160,533	$	159,628	$	164,294
Inventory associated with reserves for sales returns	$	40,661	$	44,291	$	47,569

Contract Liabilities

Contract liabilities are recorded when a customer pays consideration, or the Company has a right to an amount of consideration that is unconditional, before the transfer of a good or service to the customer, and thus represent the Company's obligation to transfer the good or service to the customer at a future date. The Company's contract liabilities primarily consist of payments received in advance of revenue recognition for subscriptions for the Company's digital fitness applications and royalty arrangements which are in in other current and other long-term liabilities, and gift cards, included in accrued expenses on the Company's Consolidated Balance Sheets. As of March 31, 2023, contract liabilities were $25.9 million (March 31, 2022: $35.3 million; December 31, 2021: $39.1 million).

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During Fiscal 2023, the Company completed an assessment of its process for estimating revenue recognized for gift card balances not expected to be redeemed (“breakage”). Based on the assessment, which included analyzing historical gift card redemption data, the Company has determined that substantially all of its gift cards are redeemed within 24 months of issuance, and after 24 months the likelihood of a gift card being redeemed is remote. Therefore, 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, the Company recognizes gift card breakage at that time when the likelihood of the gift card being redeemed is remote, which the Company has determined to be 24 months following its issuance. As a result, the Company recognized approximately $10.1 million of revenue during Fiscal 2023, that was previously included in contract liabilities, which benefited net income by $10.1 million, or $0.02 per share of Class A, B and C Common Stock.

For Fiscal 2023, including the breakage discussed above, the Company recognized approximately $19.3 million, of revenue that was previously included in contract liabilities as of March 31, 2022. For Fiscal 2021, the Company recognized approximately $21.5 million of revenue that was previously included in contract liabilities as of December 31, 2020. For the Transition Period, the Company recognized $5.0 million of revenue that was previously included in contract liabilities as of December 31, 2021. 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, and with respect to Fiscal 2023, the breakage discussed above.

NOTE 12. 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. The Company concluded the 2020 restructuring plan during the Transition Period.

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. No adjustments to expense were recorded during Fiscal 2023.

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


	Employee Related Costs		Contract Exit Costs		Other Restructuring Related Costs
Balance as of December 31, 2020	$	12,868	$	61,642	$	6,098
Net additions (recoveries) charged to expense	(1,655)		17,814		(1,494)
Cash payments	(5,473)		(47,486)		(6,078)
Foreign exchange and other	(2,192)		(565)		120
Balance as of December 31, 2021	$	3,548	$	31,405	$	(1,354)
Net additions (recoveries) charged to expense	(10)		58,555		(1,871)
Cash payments	(955)		(9,280)		—
Foreign exchange and other	89		(2,443)		3,225
Balance as of March 31, 2022	$	2,672	$	78,237	$	—
Net additions (recoveries) charged to expense	—		—		—
Cash payments	(1,057)		(76,287)		—
Foreign exchange and other	(659)		(1,832)		—
Balance as of March 31, 2023	$	956	$	118	$	—

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NOTE 13. OTHER EMPLOYEE BENEFITS

The Company offers a 401(k) Deferred Compensation Plan for the benefit of eligible employees. Employee contributions are voluntary and subject to Internal Revenue Service limitations. The Company matches a portion of the participant's contribution and recorded expense for Fiscal 2023 of $11.6 million (Fiscal 2021: $8.9 million; Fiscal 2020: $5.4 million; Transition Period: $6.1 million)

In addition, the Company offers the Under Armour, Inc. Deferred Compensation Plan which allows a select group of management or highly compensated employees, as approved by the Human Capital and Compensation Committee of the Board of Directors, to make an annual base salary and/or bonus deferral for each year. As of March 31, 2023, the Deferred Compensation Plan obligations were $14.1 million (March 31, 2022: $14.2 million; December 31, 2021: $14.5 million) and were included in other long term liabilities on the Consolidated Balance Sheets.

The Company established a Rabbi Trust to fund obligations to participants in the Deferred Compensation Plan. As of March 31, 2023, the assets held in the Rabbi Trust were trust owned life insurance ("TOLI") policies with cash-surrender values of $7.7 million (March 31, 2022: $8.4 million; December 31, 2021: $9.0 million). These assets are consolidated and are included in other long term assets on the Consolidated Balance Sheets. Refer to Note 15 for a discussion of the fair value measurements of the assets held in the Rabbi Trust and the Deferred Compensation Plan obligations.

NOTE 14. STOCK BASED COMPENSATION

The Under Armour, Inc. Third Amended and Restated 2005 Omnibus Long-Term Incentive Plan as amended (the "2005 Plan") provides for the issuance of stock options, restricted stock, restricted stock units and other equity awards to officers, directors, key employees and other persons. The 2005 Plan terminates in 2029. As of March 31, 2023, 8.3 million Class A shares and 23.9 million Class C shares are available for future grants of awards under the 2005 Plan.

Awards Granted to Employees and Non-Employee Directors

Total stock-based compensation expense associated with awards granted to employees and non-employee directors for Fiscal 2023 was $36.8 million (Fiscal 2021: $43.8 million; Fiscal 2020: $42.1 million; Transition Period: $11.8 million). The related tax benefits, excluding consideration of valuation allowances, were $6.3 million for Fiscal 2023 (Fiscal 2021: $8.2 million; Fiscal 2020: $9.0 million; Transition Period: $2.0 million). The valuation allowances associated with these benefits were $1.2 million for Fiscal 2023 (Fiscal 2021: $7.2 million; Fiscal 2020: $9.0 million; Transition Period: $1.0 million) As of March 31, 2023, the Company had $70.4 million of unrecognized compensation expense related to these awards expected to be recognized over a weighted average period of 2.06 years. Refer to "Stock Options" and "Restricted Stock and Restricted Stock Unit Awards" below for further information on these awards.

A summary of each of these plans is as follows:

Employee Stock Compensation Plan

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

Non-Employee Director Compensation Plan

The Company's Non-Employee Director Compensation Plan (the "Director Compensation Plan") provides for cash compensation and equity awards to non-employee directors of the Company under the 2005 Plan. Non-employee directors have the option to defer the value of their annual cash retainers as deferred stock units in accordance with the Under Armour, Inc. Non-Employee Deferred Stock Unit Plan (the "DSU Plan"). Each new non-employee director receives an award of restricted stock units upon the initial election to the Board of Directors, with the units covering stock valued at $100 thousand on the grant date and vesting in three equal annual installments. In addition, each non-employee director receives, following each annual stockholders' meeting, a grant under the 2005 Plan of restricted stock units covering stock valued at $150 thousand on the grant date. However, in May 2022, following the 2022 annual stockholders' meeting, each non-employee director received a grant under the 2005 plan of restricted stock units covering stock valued at $187.5 thousand to account for the Company's change in fiscal year. Each award vests 100% on the date of the next annual stockholders' meeting following the grant date.

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The receipt of the shares otherwise deliverable upon vesting of the restricted stock units automatically defers into deferred stock units under the DSU Plan. Under the DSU Plan each deferred stock unit represents the Company’s obligation to issue one share of the Company's Class A or Class C Common Stock with the shares delivered six months following the termination of the director's service. The Company had 0.8 million deferred stock units outstanding as of March 31, 2023.

Employee Stock Purchase Plan

The Company's Employee Stock Purchase Plan (the "ESPP") allows for the purchase of Class A Common Stock and Class C Common Stock by all eligible employees at a 15% discount from fair market value subject to certain limits as defined in the ESPP. As of March 31, 2023, 2.7 million Class A shares and 1.1 million Class C shares are available for future purchases under the ESPP. During Fiscal 2023, 536.0 thousand Class C shares were purchased under the ESPP (Fiscal 2021: 234.7 thousand; Fiscal 2020: 482.9 thousand; Transition Period: 69.8 thousand).

Awards granted to Marketing Partners

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

Total stock-based compensation expense related to these awards for Fiscal 2023 was $3.3 million (Fiscal 2021: $3.5 million; Fiscal 2020: $3.5 million; Transition Period: $0.8 million). As of March 31, 2023, we had $4.3 million of unrecognized compensation expense associated with these awards expected to be recognized over a weighted average period of 1.68 years.

As previously disclosed, on April 3, 2023, subsequent to the fiscal year end, the Company issued an award of restricted stock units for 8.8 million shares of the Company's Class C common stock to an entity affiliated with professional basketball player Stephen Curry. The award was issued in connection with Mr. Curry's entry into a stock unit agreement and an Under Armour, Inc. Athlete Product, Brand, Ambassador, and Endorsement Agreement with the Company, pursuant to which Mr. Curry is continuing his relationship with the Company.

Summary by Award Classification:

Stock Options

No stock options were granted during Fiscal 2023, Fiscal 2021 or the Transition Period. The weighted average fair value of stock options granted in Fiscal 2020 was $6.61. The fair value of each stock option granted is estimated on the date of grant using the Black-Scholes option-pricing model with the following weighted average assumptions:

Year Ended
March 31, 2023

Three Months Ended March 31, 2022 (Transition Period)

Year Ended December 31, 2021

Year Ended December 31, 2020

Risk-free interest rate

n/a

1.5

Average expected life in years

n/a

6.25

Expected volatility

n/a

43.1

Expected dividend yield

n/a

—

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A summary of the Company's stock options activity for the year ended March 31, 2023 is presented below:


	Number of Stock Options	Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (Years)	Total Intrinsic Value
Outstanding at March 31, 2022	1,578	$	19.44	5.82	$	217
Granted, at fair market value	—	—		—	—
Exercised	—	—		—	—
Forfeited	—	—		—	—
Outstanding at March 31, 2023	1,578	$	19.44	4.82	$	—
Options exercisable at March 31, 2023	1,503	$	19.66	4.72	$	—

No stock options were exercised during Fiscal 2023 or the Transition Period. For Fiscal 2021 and Fiscal 2020, the intrinsic value of stock options exercised was $0.2 million and $4.5 million, respectively. The income tax benefits related to stock options exercised, excluding consideration of valuation allowances were $0.0 million and $1.2 million for Fiscal 2021 and Fiscal 2020, respectively.

Restricted Stock and Restricted Stock Unit Awards

A summary of the Company's restricted stock and restricted stock unit awards activity for the year ended March 31, 2023 is presented below:


	Number of Restricted Shares	Weighted Average Grant Date Fair Value
Outstanding at March 31, 2022	7,807	$	16.57
Granted	3,759	8.75
Forfeited	(2,002)	14.88
Vested	(1,906)	17.53
Outstanding at March 31, 2023	7,658	$	13.01

The awards outstanding at March 31, 2023 in the table above includes 1.1 million performance-based restricted stock units that were awarded to certain executives and key employees during Fiscal 2023 under the 2005 Plan. The performance-based restricted stock units awarded have a weighted average fair value of $9.13 and have vesting that is tied to the achievement of certain combined annual revenue and operating income targets. The Company deemed the achievement of certain of these targets probable and recorded $1.4 million of stock-based compensation expense related to these awards during Fiscal 2023. The Company assesses the probability of the achievement of the remaining revenue and operating income targets at the end of each reporting period and based on that assessment cumulative adjustments may be recorded in future periods.

NOTE 15. FAIR VALUE MEASUREMENTS

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

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

The Company's financial assets (liabilities) measured at fair value ~~are set forth in~~on a recurring basis consisted of the ~~table below:~~following types of instruments as of the following periods:

December 31, 2019 December 31, 2018
(In thousands) Level 1 Level 2 Level 3 Level 1 Level 2 Level 3
Derivative foreign currency contracts (see Note 15) — (7,151) — — 19,531 —
Interest rate swap contracts (see Note 15) — — — — 1,567 —
TOLI policies held by the Rabbi Trust — 6,543 — — 5,328 —
Deferred Compensation Plan obligations — (10,839) — — (6,958) —


	March 31, 2023						March 31, 2022						December 31, 2021
	Level 1		Level 2		Level 3		Level 1		Level 2		Level 3		Level 1		Level 2		Level 3
Derivative foreign currency contracts (see Note 16)	$	—	$	(3,127)	$	—	$	—	$	988	$	—	$	—	$	631	$	—
TOLI policies held by the Rabbi Trust (see Note 13)	$	—	$	7,691	$	—	$	—	$	8,379	$	—	$	—	$	9,008	$	—
Deferred Compensation Plan obligations (see Note 13)	$	—	$	(14,082)	$	—	$	—	$	(14,230)	$	—	$	—	$	(14,489)	$	—

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 ~~Company purchases marketable securities that are designated as available-for-sale. 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’~~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 interest rate swap contracts represent gains and losses on the derivative contracts, which is the net difference between the fixed interest to be paid and variable interest to be received over the term of the contract based on current market rates. The fair value of the ~~trust owned life insurance (“TOLI”)~~TOLI policies held by the Rabbi Trust isare 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~~"Deferred Compensation ~~Plan”~~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’~~participants' selected investments.

As of December 31, 2019 and 2018, the fair value of the Company's Senior Notes was $587.5 million and $500.1 million, respectively. The carrying value of the Company's other long term debt approximated its fair value as of December 31, 2019 and 2018. 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).

~~11. Provision for Income Taxes~~

~~Income (loss) before income taxes is as follows:~~As of March 31, 2023, the fair value of the Convertible Senior Notes

Year Ended December 31,
(In thousands) 2019 2018 2017
Income (loss) before income taxes
United States $ 81,122 $ (121,396) $ (131,475)
Foreign 128,720 53,608 121,166
Total $ 209,842 $ (67,788) $ (10,309)

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~~The components of the income tax expense (benefit) consisted of the following:~~

Year Ended December 31,
(In thousands) 2019 2018 2017
Current
Federal $ 7,232 $ (15,005) $ (46,931)
State 771 3,253 (8,336)
Foreign 21,952 34,975 34,005
29,955 23,223 (21,262)
Deferred
Federal 12,750 (27,808) 51,447
State 25,508 (6,202) 12,080
Foreign 1,811 (9,765) (4,314)
40,069 (43,775) 59,213
Income tax expense (benefit) $ 70,024 $ (20,552) $ 37,951

~~A reconciliation from the U.S. statutory federal income tax rate to the effective income tax rate is as follows:~~

Year Ended December 31,
2019 2018 2017
U.S. federal statutory income tax rate $ 44,067 21.0 % $ (14,235) 21.0 % $ (3,608) 35.0 %
State taxes, net of federal tax impact 4,620 2.2 % (6,715) 9.9 % (9,537) 92.5 %
Unrecognized tax benefits (2,031) (1.0) % (7,598) 11.2 % 1,178 (11.4) %
Permanent tax benefits/nondeductible expenses 328 0.2 % 5,609 (8.2) % 2,246 (21.8) %
Intercompany asset sale — — % (18,834) 27.8 % — — %
Goodwill impairment — — % — — % 8,522 (82.7) %
Foreign rate differential (10,494) (5.0) % (12,294) 18.1 % (25,563) 248.0 %
Valuation allowances 30,137 14.4 % 33,058 (48.8) % 29,563 (286.8) %
Impacts related to Tax Act — — % 1,536 (2.3) % 38,833 (376.7) %
Other 3,397 1.6 % (1,079) 1.6 % (3,683) 35.7 %
Effective income tax rate $ 70,024 33.4 % $ (20,552) 30.3 % $ 37,951 (368.2) %

~~The Company's income tax expense (benefit) for 2019, as compared to 2018,~~ was higher primarily due to pre-tax income in 2019 compared to pre-tax losses in 2018, increases in valuation allowances recorded for certain U.S. state jurisdictions, and the one-time benefit in 2018 for an intercompany intangible asset sale. These increases were partially offset by a decrease in valuation allowances recorded for certain foreign jurisdictions in 2019 compared to 2018.

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~~Deferred tax assets and liabilities consisted of the following:~~

December 31,
(In thousands) 2019 2018
Deferred tax assets
Lease liability and deferred rent 140,673 17,555
Foreign net operating loss carry-forwards 31,524 23,164
Reserves and accrued liabilities 25,676 47,509
Tax basis inventory adjustment 25,620 20,165
U.S. state net operating loss carryforward 24,124 23,818
Allowance for doubtful accounts and sales return reserves 23,257 28,620
Intangible assets 20,041 21,886
Stock-based compensation 14,828 14,119
Foreign tax credit carry-forwards 11,807 10,274
State tax credits, net of federal impact 7,480 8,432
Inventory obsolescense reserves 6,589 8,529
Other 4,835 2,209
Total deferred tax assets 336,454 226,280
Less: valuation allowance (101,997) (72,710)
Total net deferred tax assets 234,457 153,570
Deferred tax liabilities
Right-of-use asset (118,917) —
Property, plant and equipment (16,956) (27,480)
Prepaid expenses (15,862) (11,058)
Other (1,717) (4,041)
Total deferred tax liabilities (153,452) (42,579)
Total deferred tax assets, net $ 81,005 $ 110,991

~~All deferred tax assets and liabilities are classified as non-current on the consolidated balance sheets as of~~$85.8 million (March 31, 2022: $126.6 million; December 31, 2019 and December 31, 2018. In evaluating its ability to realize the net deferred tax assets, the Company considered all available positive and negative evidence, including its past operating results and the forecast of future market growth, forecasted earnings, future taxable income, and prudent and feasible tax planning strategies. The assumptions utilized in determining future taxable income require significant judgment and actual operating results in future years could differ from the current assumptions, judgments and estimates.

A significant portion of the Company’s deferred tax assets relate to U.S. federal and state taxing jurisdictions. Realization of these deferred tax assets is dependent on future U.S. pre-tax earnings. In evaluating the recoverability of these deferred tax assets at December 31, 2019, the Company has considered all available evidence, both positive and negative, including but not limited to the following:

~~Positive~~

•2021: $149.6 million).~~2019 pre-tax income plus tax permanent differences and taxable income in the U.S. federal and certain state jurisdictions;~~

•~~Three year cumulative pre-tax income plus tax permanent differences in the U.S. federal jurisdiction;~~

•~~Forecasted future pre-tax income plus tax permanent differences in the U.S. federal and certain state jurisdictions;~~

•~~No history of U.S. federal and state tax attributes expiring unused;~~

•~~Restructuring plans undertaken in 2017, 2018, and being assessed for 2020, which aim to improve future profitability;~~

•~~Available prudent and feasible tax planning strategies may exist;~~

•~~Reversal of deferred tax liabilities and timing thereof.~~

~~Negative~~

•~~Three year cumulative pre-tax losses plus tax permanent differences in certain state jurisdictions;~~

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•~~Forecasted year over year U.S. revenue declines in 2020 which decrease profitability in the U.S. federal and certain state jurisdictions;~~

•~~Inherent challenges in forecasting future pre-tax earnings which rely, in part, on improved profitability from restructuring efforts;~~

•~~The continued challenges in the U.S. consumer retail business environment.~~

The Company believes that the weight of the positive evidence outweighs the negative evidence regarding the realization of its U.S. federal deferred tax assets. The Company will continue to evaluate its ability to realize these assets on a quarterly basis.

The Company believes the weight of the negative evidence outweighs the positive evidence regarding the realization of the majority of the state deferred tax assets, including state net operating loss carryforwards, state tax credit carryforwards, and certain other state deferred tax assets, and has recorded valuation allowances of $54.5 million against these state deferred tax assets.

As of March 31, 2023, the fair value of the Senior Notes was $553.9 million (March 31, 2022: $580.0 million; December 31, ~~2019, the Company had $24.1 million~~2021: $619.9 million).

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

Certain assets are not remeasured to fair value on an ongoing basis but are subject to fair value adjustments only in ~~deferred tax~~certain circumstances. These assets associated with $383.6 million in state net operating loss carryforwards and $7.5 million in deferred tax assets associated with state tax credits, net of federal benefit, the majority of which are definite lived. Certain of the definite lived state net operating losses and state tax credits will begin to expire within 1 to 5 years, and the majority will begin to expire within 5 to 20 years.

As of December 31, 2019, the Company had $31.5 million in deferred tax assets associated with approximately $124.8 million in foreign net operating loss carryforwards and $11.8 million in deferred tax assets associated with foreign tax credit carryforwards. While the majority of the foreign net operating loss carryforwards and foreign tax credit carryforwards have an indefinite carryforward period, certain are definite lived, with the majority to expire within 5 to 12 years. Additionally, as of December 31, 2019, the Company is not able to forecast the utilization of a majority of the deferred tax assets associated with foreign net operating loss carryforwards, foreign tax credit carryforwards and certain other foreign deferred taxcan include long-lived assets and ~~has recorded a valuation allowance of $47.5 million against these foreign deferred tax assets.~~

As of December 31, 2019, approximately $165.4 million of cash and cash equivalents was held by the Company's non-U.S. subsidiaries whose cumulative undistributed earnings total $765.5 million. The Tax Act imposed U.S. federal tax on all post-1986 foreign unrepatriated earnings accumulated through December 31, 2017. The portion of these earningsgoodwill that have been reduced to fair value when impaired. Assets that are written down to fair value when impaired are not ~~subject~~subsequently adjusted to U.S. federal income tax as part of the one-time transition tax should, in general, not be subject to U.S. federal income tax. The Company will continue to permanently reinvest these earnings, as well as future earnings from our foreign subsidiaries, to fund international growth and operations. If the Company were to repatriate indefinitely reinvested foreign funds, the Company would still be required to accrue and pay certain taxes upon repatriation, including foreign withholding taxes and certain U.S. state taxes and record foreign exchange rate impacts. Determination of the unrecorded deferred tax liability that would be incurred if such amounts were repatriated is not practicable.

As of December 31, 2019 and 2018, the total liability for unrecognized tax benefits, including related interest and penalties, was approximately $44.3 million and $60.0 million, respectively. The following table represents a reconciliation of the Company's total unrecognized tax benefits balances, excluding interest and penalties, for the years ended December 31, 2019, 2018 and 2017.

Year Ended December 31,
(In thousands) 2019 2018 2017
Beginning of year $ 55,855 $ 51,815 $ 64,359
Increases as a result of tax positions taken in a prior period 1,545 1,978 457
Decreases as a result of tax positions taken in a prior period (11,005) (1,600) (40)
Increases as a result of tax positions taken during the current period 1,158 12,802 14,580
Decreases as a result of settlements during the current period (6,359) — (13,885)
Reductions as a result of a lapse of statute of limitations during the current period — (9,140) (13,656)
End of year $ 41,194 $ 55,855 $ 51,815

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~~As of December 31, 2019, $32.8 million of unrecognized tax benefits, excluding interest and penalties, would impact the Company's effective tax rate if recognized.~~

~~As of December 31, 2019, 2018 and 2017, the liability for unrecognized tax benefits included $3.1 million, $4.2 million, and $3.5 million, respectively, for the accrual of interest and penalties.~~For each of the years ended December 31, 2019, 2018 and 2017, the Company recorded $2.0 million, $1.9 million, and $1.6 million, respectively, for the accrual of interest and penalties in its consolidated statements of operations.~~The Company recognizes accrued interest and penalties related to unrecognized tax benefits in the provision for income taxes on the consolidated statements of operations.~~

~~The Company files income tax returns in the U.S. federal jurisdiction and various state and foreign jurisdictions.The Company is currently under audit by the U.S. Internal Revenue Service for the years 2015 through 2017 and by the Chilean Internal Revenue Service for the years 2015 through 2018.The majority of the Company's other returns for years before 2016 are no longer subject to U.S. federal, state and local or foreign income tax examinations by tax authorities.~~

The total amount of unrecognized tax benefits relating to the Company's tax positions is subject to change based on future events including, but not limited to, the settlements of ongoing tax audits and assessments and the expiration of applicable statutes of limitations.Although the outcomes and timing of such events are highly uncertain, the Company does not anticipate that the balance of gross unrecognized tax benefits, excluding interest and penalties, will change significantly during the next twelve months. However, changes in the occurrence, expected outcomes, and timing of such events could cause the Company's current estimate to change materially in the future.fair value unless further impairment occurs.

~~12. Earnings per Share~~

The calculation of earnings per share for common stock shown below excludes the income attributable to outstanding restricted stock awards from the numerator and excludes the impact of these awards from the denominator. The following is a reconciliation of basic earnings per share to diluted earnings per share:

Year Ended December 31,
(In thousands, except per share amounts) 2019 2018 2017
Numerator
Net income (loss) $ 92,139 $ (46,302) $ (48,260)
Denominator
Weighted average common shares outstanding Class A, B and C 450,964 445,815 440,729
Effect of dilutive securities Class A, B and C 3,310 — —
Weighted average common shares and dilutive securities outstanding Class A, B and C 454,274 445,815 440,729
Basic net income (loss) per share of Class A, B and C common stock $ 0.20 $ (0.10) $ (0.11)
Diluted net income (loss) per share of Class A, B and C common stock $ 0.20 $ (0.10) $ (0.11)

Effects of potentially dilutive securities are presented only in periods in which they are dilutive. Stock options, and restricted stock units representing 1.8 million, 3.3 million and 5.0 million shares of Class A and C common stock outstanding for the years ended December 31, 2019, 2018 and 2017, respectively, were excluded from the computation of diluted earnings per share because their effect would be anti-dilutive.

~~13. Stock-Based Compensation~~

~~Stock Compensation Plans~~

The Under Armour, Inc. Third Amended and Restated 2005 Omnibus Long-Term Incentive Plan as amended (the “2005 Plan”) provides for the issuance of stock options, restricted stock, restricted stock units and other equity awards to officers, directors, key employees and other persons. Stock options and restricted stock and restricted stock unit awards under the 2005 Plan generally vest ratably over a ~~two~~ to ~~five~~ year period. The contractual term for stock options is generally 10 years from the date of grant. The Company generally receives a tax deduction for any ordinary income recognized by a participant in respect to an award under the 2005 Plan. The

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~~2005 Plan terminates in 2025. As of December 31, 2019, 9.0 million Class A shares and 27.4 million Class C shares are available for future grants of awards under the 2005 Plan.~~

Total stock-based compensation expense for the years ended December 31, 2019, 2018 and 2017 was $49.6 million, $41.8 million and $39.9 million, respectively. The related tax benefits were $9.1 million, $8.9 million, and $9.0 million for the years ended December 31, 2019, 2018, and 2017, respectively. As of December 31, 2019, the Company had $90.5 million of unrecognized compensation expense expected to be recognized over a weighted average period of 2.43 years. This unrecognized compensation expense does not include any expense related to performance-based restricted stock units and stock options for which the performance targets have not been deemed probable as of December 31, 2019. Refer to “Stock Options” and “Restricted Stock and Restricted Stock Units” below for further information on these awards.

~~Employee Stock Purchase Plan~~

The Company’s Employee Stock Purchase Plan (the “ESPP”) allows for the purchase of Class A Common Stock and Class C Common Stock by all eligible employees at a 15% discount from fair market value subject to certain limits as defined in the ESPP. As of December 31, 2019, 2.7 million Class A shares and 2.5 million Class C shares are available for future purchases under the ESPP. During the years ended December 31, 2019, 2018 and 2017, 329.1 thousand, 393.8 thousand and 563.9 thousand Class C shares were purchased under the ESPP, respectively.

~~Non-Employee Director Compensation Plan and Deferred Stock Unit Plan~~

The Company’s Non-Employee Director Compensation Plan (the “Director Compensation Plan”) provides for cash compensation and equity awards to non-employee directors of the Company under the 2005 Plan. Non-employee directors have the option to defer the value of their annual cash retainers as deferred stock units in accordance with the Under Armour, Inc. Non-Employee Deferred Stock Unit Plan (the “DSU Plan”). Each new non-employee director receives an award of restricted stock units upon the initial election to the Board of Directors, with the units covering stock valued at $100.0 thousand on the grant date and vesting in three equal annual installments. In addition, each non-employee director receives, following each annual stockholders’ meeting, a grant under the 2005 Plan of restricted stock units covering stock valued at $150.0 thousand on the grant date. Each award vests 100% on the date of the next annual stockholders’ meeting following the grant date.

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

~~Stock Options~~

The weighted average fair value of a stock option granted for the years ended December 31, 2019, 2018 and 2017 was $19.39, $15.41 and $19.04, respectively. The fair value of each stock option granted is estimated on the date of grant using the Black-Scholes option-pricing model with the following weighted average assumptions:

Year Ended December 31,
2019 2018 2017
Risk-free interest rate 2.5 % 2.8 % 2.1 %
Average expected life in years 6.50 6.50 6.50
Expected volatility 41.0 % 40.4 % 39.6 %
Expected dividend yield — % — % — %

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~~A summary of the Company’s stock options as of December 31, 2019, 2018 and 2017, and changes during the years then ended is presented below:~~

(In thousands, except per share amounts) Year Ended December 31,
2019 2018 2017

Number
of Stock
Options
Weighted
Average
Exercise
Price
Number
of Stock
Options
Weighted
Average
Exercise
Price
Number
of Stock
Options
Weighted
Average
Exercise
Price
Outstanding, beginning of year 2,732 $ 12.98 3,782 $ 12.71 4,265 $ 9.63
Granted, at fair market value 460 19.39 579 15.41 734 19.04
Exercised (733) 3.41 (1,262) 5.53 (1,046) 3.72
Expired — — — — — —
Forfeited (490) 19.04 (367) 35.55 (171) 17.59
Outstanding, end of year 1,969 $ 16.61 2,732 $ 12.98 3,782 $ 12.71
Options exercisable, end of year 913 $ 15.45 1,366 $ 7.70 2,512 $ 5.85

Included in the table above are 0.2 million and 0.3 million performance-based stock options awarded to the Company’s Executive Chairman and Brand Chief under the 2005 Plan during the years ended December 31, 2019 and 2018, respectively. The performance-based stock options awarded in 2019 and 2018 have weighted average fair values of $19.39 and $15.41, respectively, and have vesting that is tied to the achievement of certain combined annual operating income targets.

~~The intrinsic value of stock options exercised during the years ended December 31, 2019, 2018 and 2017 was $12.4 million, $15.2 million and $16.3 million, respectively.~~

~~For the years ended December 31, 2019, 2018, and 2017 income tax benefits related to stock options exercised were $2.0 million, $3.0 million, and $5.8 million, respectively.~~

~~The following table summarizes information about stock options outstanding and exercisable as of December 31, 2019:~~

~~(In thousands, except per share amounts)~~

Options Outstanding Options Exercisable
Number of
Underlying
Shares
Weighted
Average
Exercise
Price Per
Share
Weighted
Average
Remaining
Contractual
Life (Years)
Total
Intrinsic
Value
Number of
Underlying
Shares
Weighted
Average
Exercise
Price Per
Share
Weighted
Average
Remaining
Contractual
Life (Years)
Total
Intrinsic
Value
1,969 $ 16.61 6.19 $ 9,379 913 $ 15.45 3.66 $ 7,725

~~Restricted Stock and Restricted Stock Units~~

~~A summary of the Company’s restricted stock and restricted stock units as of December 31, 2019, 2018 and 2017, and changes during the years then ended is presented below:~~

Year Ended December 31,
2019 2018 2017
(In thousands, except per share amounts)
Number
of
Restricted
Shares
Weighted
Average
Grant Date Fair Value
Number
of
Restricted
Shares
Weighted
Average
Fair Value
Number
of
Restricted
Shares
Weighted
Average
Fair Value
Outstanding, beginning of year 8,284 $ 18.03 9,923 $ 24.41 6,771 $ 19.68
Granted 3,501 19.32 5,165 15.57 7,630 18.84
Forfeited (2,760) 18.56 (4,745) 27.43 (2,290) 28.71
Vested (2,364) 20.24 (2,059) 24.95 (2,188) 24.78
Outstanding, end of year 6,661 $ 18.02 8,284 $ 18.03 9,923 $ 24.41

Included in the table above are 0.6 million, 0.8 million and 1.9 million performance-based restricted stock units awarded to certain executives and key employees under the 2005 Plan during the years ended December 31, 2019, 2018 and 2017, respectively. The performance-based restricted stock units awarded in 2019, 2018 and 2017 have weighted average grant date fair values of $19.39, $15.60, and $18.76, respectively, and have vesting that is tied to the achievement of certain combined annual revenue and operating income targets.

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During the year ended December 31, 2019, the Company deemed the achievement of certain revenue and operating income targets improbable for the performance-based stock options and restricted stock units granted in 2019, and recorded a reversal of expense of $1.5 million for the three months ended December 31, 2019. During the year ended December 31, 2017, the Company deemed the achievement of certain revenue and operating income targets improbable for the performance-based stock options and restricted stock units granted in 2017, and recorded a reversal of expense of $4.2 million for the three months ended December 31, 2017.

~~Warrants~~

The Company issued fully vested and non-forfeitable warrants to purchase 1.92 million shares of the Company's Class A Common Stock and 1.93 million shares of the Company’s Class C Common Stock to NFL Properties as partial consideration for footwear promotional rights which were recorded as an intangible asset in 2006. The warrants had a term of 12 years from the date of issuance and an exercise price of $4.66 per Class A share and $4.56 per Class C share. In August 2018, all of the warrants were exercised on a net exercise basis.

~~14. Other Employee Benefits~~

The Company offers a 401(k) Deferred Compensation Plan for the benefit of eligible employees. Employee contributions are voluntary and subject to Internal Revenue Service limitations. The Company matches a portion of the participant’s contribution and recorded expense of $7.5 million, $9.9 million and $7.4 million for the years ended December 31, 2019, 2018 and 2017, respectively. Shares of the Company’s Class A Common Stock and Class C common stock are not investment options in this plan.

In addition, the Company offers the Under Armour, Inc. Deferred Compensation Plan which allows a select group of management or highly compensated employees, as approved by the Compensation Committee, to make an annual base salary and/or bonus deferral for each year. As of December 31, 2019 and 2018, the Deferred Compensation Plan obligations were $10.8 million and $7.0 million, respectively, and were included in other long term liabilities on the consolidated balance sheets.

The Company established the Rabbi Trust to fund obligations to participants in the Deferred Compensation Plan. As of December 31, 2019 and 2018, the assets held in the Rabbi Trust were TOLI policies with cash-surrender values of $6.5 million and $5.3 million, respectively. These assets are consolidated and are included in other long term assets on the consolidated balance sheet. Refer to Note 10 for a discussion of the fair value measurements of the assets held in the Rabbi Trust and the Deferred Compensation Plan obligations.

~~15. Risk Management and Derivatives~~

~~Foreign Currency Risk Management~~NOTE 16. RISK MANAGEMENT AND DERIVATIVES

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

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

The Company's foreign exchange risk management program consists of designated cash flow hedges and undesignated hedges. As of ~~December~~March 31, ~~2019,~~2023, the Company has hedge instruments primarily ~~for~~ for:

•British Pound/U.S. ~~Dollar,~~ Dollar;

•U.S. Dollar/Chinese ~~Renminbi,~~ Renminbi;

•Euro/U.S. Dollar;

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•U.S. Dollar/Canadian ~~Dollar, Euro/U.S. Dollar,~~ Dollar;

•U.S. Dollar/Mexican ~~Peso,~~Peso; and

•U.S. Dollar/~~Japanese Yen currency pairs.~~ Korean Won.

All derivatives are recognized on the ~~consolidated balance sheets~~Consolidated Balance Sheets at fair value and classified based on the ~~instrument’s~~instrument's maturity date.

~~Table~~The following table presents the fair values of ~~Contents~~

derivative instruments within the Consolidated Balance Sheets. Refer to Note 15 of the Consolidated Financial Statements for a discussion of the fair value measurements.


(In thousands)		Balance Sheet Classification	December 31, 2019				December 31, 2018
												Balance Sheet Classification		March 31, 2023				March 31, 2022				December 31, 2021
Derivatives designated as hedging instruments under ASC 815	Derivatives designated as hedging instruments under ASC 815												Derivatives designated as hedging instruments under ASC 815
Foreign currency contracts	Foreign currency contracts	Other current assets	$	4,040			$	19,731	Foreign currency contracts			Other current assets		$	22,473			$	11,561			$	7,488
Foreign currency contracts	Foreign currency contracts	Other long term assets	24				—		Foreign currency contracts			Other long term assets		619				2,730				2,887
Interest rate swap contracts		Other long term assets	—				1,567
Total derivative assets designated as hedging instruments	Total derivative assets designated as hedging instruments				$	4,064			$	21,298	Total derivative assets designated as hedging instruments					$	23,092			$	14,291			$	10,375

Foreign currency contracts	Foreign currency contracts	Other current liabilities	$	8,772			$	228	Foreign currency contracts			Other current liabilities		$	21,622			$	11,209			$	8,663
Foreign currency contracts	Foreign currency contracts	Other long term liabilities	2,443				—		Foreign currency contracts			Other long term liabilities		5,769				3,645				779
Total derivative liabilities designated as hedging instruments	Total derivative liabilities designated as hedging instruments				$	11,215			$	228	Total derivative liabilities designated as hedging instruments					$	27,391			$	14,854			$	9,442

Derivatives not designated as hedging instruments under ASC 815	Derivatives not designated as hedging instruments under ASC 815												Derivatives not designated as hedging instruments under ASC 815
Foreign currency contracts	Foreign currency contracts	Other current assets	$	2,337			$	1,097	Foreign currency contracts			Other current assets		$	3,408			$	4,412			$	1,999
Total derivative assets not designated as hedging instruments	Total derivative assets not designated as hedging instruments				$	2,337			$	1,097	Total derivative assets not designated as hedging instruments					$	3,408			$	4,412			$	1,999

Foreign currency contracts	Foreign currency contracts	Other current liabilities	$	9,510			$	2,307	Foreign currency contracts			Other current liabilities		$	6,563			$	1,213			$	4,648
Foreign currency contracts									Foreign currency contracts			Other long term liabilities		$	4			$	—			$	—
Total derivative liabilities not designated as hedging instruments	Total derivative liabilities not designated as hedging instruments				$	9,510			$	2,307	Total derivative liabilities not designated as hedging instruments					$	6,567			$	1,213			$	4,648


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~~468-2512
(Address of principal executive offices) (Zip Code)						(~~Registrant’s Telephone Number, Including Area Code)~~Registrant's telephone number, including area code)


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)


Period	Total Number of Shares Purchased	Average Price Paid per Share		Total Number of Shares Purchased as Part of a Publicly Announced Program	Approximately Dollar Value of Shares that May Yet be Purchased Under the Program (in millions)
01/01/2023 to 01/31/2023	1,049,821	$	9.14	1,049,821	$	75.0
02/01/2023 to 02/28/2023	—	$	—	—	$	75.0
03/01/2023 to 03/31/2023	—	$	—	—	$	75.0


Plan Category	Class of Common Stock	Number of securities to be issued upon exercise of outstanding options, warrants and rights (a)	Weighted-average exercise price of outstanding options, warrants and rights (b)		Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) (c)
Equity compensation plans approved by security holders	Class A	1,647,644	$	14.85	11,732,941
Equity compensation plans approved by security holders	Class C	10,450,611	$	16.96	29,864,112
Equity compensation plans not approved by security holders	Class A	111,427	$	—	—
Equity compensation plans not approved by security holders	Class C	112,215	$	—	—


		12/31/2014		12/31/2015		12/31/2016		12/31/2017		12/31/2018		12/31/2019			12/31/2017		12/31/2018		12/31/2019		12/31/2020		12/31/2021		3/31/2022		3/31/2023
Under Armour, Inc.	Under Armour, Inc.	$	100.00	$	118.70	$	82.81	$	41.13	$	50.37	$	61.57	Under Armour, Inc.	$	100.00	$	122.45	$	149.69	$	118.99	$	146.85	$	117.94	$	65.76
S&P 500	S&P 500	$	100.00	$	101.38	$	113.51	$	138.29	$	132.23	$	173.86	S&P 500	$	100.00	$	95.62	$	125.72	$	148.85	$	191.58	$	182.77	$	168.65
S&P 500 Apparel, Accessories & Luxury Goods	S&P 500 Apparel, Accessories & Luxury Goods	$	100.00	$	76.23	$	67.62	$	81.46	$	68.62	$	84.57	S&P 500 Apparel, Accessories & Luxury Goods	$	100.00	$	84.24	$	103.82	$	93.06	$	98.71	$	81.67	$	56.59


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


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


Name	Age	Position
Kevin Plank	50	Executive Chair and Brand Chief
Stephanie Linnartz	55	President and Chief Executive Officer
Colin Browne	58	Chief Operating Officer
David Bergman	50	Chief Financial Officer
David Baxter	56	President of the Americas
Lisa Collier	58	Chief Product Officer
Tchernavia Rocker	49	Chief People and Administrative Officer
Mehri Shadman-Valavi	41	Chief Legal Officer and Corporate Secretary


	At December 31,
(In thousands)	2019		2018		2017		2016		2015
Cash and cash equivalents	$	788,072	$	557,403	$	312,483	$	250,470	$	129,852
Working capital (1)	1,280,200		1,277,651		1,277,304		1,279,337		1,019,953
Inventories	892,258		1,019,496		1,158,548		917,491		783,031
Total assets (2)	4,843,531		4,245,022		4,006,367		3,644,331		2,865,970
Total debt, including current maturities	592,687		728,834		917,046		817,388		666,070
Total stockholders’ equity	$	2,150,087	$	2,016,871	$	2,018,642	$	2,030,900	$	1,668,222


~~ITEM 7.~~			~~MANAGEMENT’S~~ ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS


			Deduct:		Add:
(In thousands)	Year ended December 31, 2021		Three Months ended March 31, 2021		Three Months Ended March 31, 2022		Twelve months ended March 31, 2022
Net revenues	$	5,683,466	$	1,257,195	$	1,300,945	$	5,727,216
Cost of goods sold	2,821,967		628,554		695,781		2,889,194
Gross profit	2,861,499		628,641		605,164		2,838,022
Selling, general and administrative expenses	2,334,691		514,638		594,446		2,414,499
Restructuring and impairment charges	40,518		7,113		56,674		90,079
Income (loss) from operations	486,290		106,890		(45,956)		333,444
Interest income (expense), net	(44,300)		(14,137)		(6,154)		(36,317)
Other income (expense), net	(51,113)		(7,180)		(51)		(43,984)
Income (loss) before income taxes	390,877		85,573		(52,161)		253,143
Income tax expense (benefit)	32,072		9,881		8,181		30,372
Income (loss) from equity method investments	1,255		2,060		732		(73)
Net income (loss)	$	360,060	$	77,752	$	(59,610)	$	222,698


(As a percentage of net revenues)	Year ended March 31, 2023		Twelve months ended March 31, 2022
Net revenues	100.0	%	100.0	%
Cost of goods sold	55.1	%	50.4	%
Gross profit	44.9	%	49.6	%
Selling, general and administrative expenses	40.1	%	42.2	%
Restructuring and impairment charges	—	%	1.6	%
Income (loss) from operations	4.8	%	5.8	%
Interest income (expense), net	(0.2)	%	(0.6)	%
Other income (expense), net	0.3	%	(0.8)	%
Income (loss) before income taxes	4.9	%	4.4	%
Income tax expense (benefit)	(1.7)	%	0.5	%
Loss from equity method investment	—	%	—	%
Net income (loss)	6.6	%	3.9	%


	Quarter Ended (unaudited)
(In thousands)	3/31/2018			6/30/2018			9/30/2018			12/31/2018			3/31/2019			6/30/2019			9/30/2019			12/31/2019
Net revenues	$	1,185,370		$	1,174,859		$	1,442,976		$	1,389,980		$	1,204,722		$	1,191,729		$	1,429,456		$	1,441,225
Gross profit	523,453			526,584			665,207			625,227			544,787			554,321			689,898			681,527
Marketing SG&A expenses	126,618			139,497			130,665			162,956			133,876			144,734			133,924			166,431
Other SG&A expenses	388,016			413,122			396,975			424,490			375,652			421,069			417,054			441,023
Restructuring and impairment charges	37,480			78,840			18,601			48,228			—			—			—			—
Income (loss) from operations	$	(28,661)		$	(104,875)		$	118,966		$	(10,447)		$	35,259		$	(11,482)		$	138,920		$	74,073
(As a percentage of annual totals)
Net revenues	22.8		%	22.6		%	27.8		%	26.8		%	22.9		%	22.6		%	27.1		%	27.4		%
Gross profit	22.4		%	22.5		%	28.4		%	26.7		%	22.1		%	22.4		%	27.9		%	27.6		%
Marketing SG&A expenses	22.6		%	24.9		%	23.3		%	29.1		%	23.1		%	25.0		%	23.1		%	28.7		%
Other SG&A expenses	23.9		%	25.5		%	24.5		%	26.2		%	22.7		%	25.4		%	25.2		%	26.7		%
Restructuring and impairment charges	20.5		%	43.0		%	10.2		%	26.3		%	—		%	—		%	—		%	—		%
Income (loss) from operations	114.6		%	419.2		%	(475.5)		%	41.8		%	14.9		%	(4.8)		%	58.7		%	31.3		%


		Class A Common Stock				Class B Convertible Common Stock					Class C Common Stock						Additional Paid-in-Capital					Retained Earnings		Accumulated Other Comprehensive Income		Total Equity	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																		Shares		Amount	Shares		Amount		Shares		Amount		Total Equity
Balance as of December 31, 2016		183,815	61		34,450	11		220,174	73		823,484		1,259,414		(52,143)				$	2,030,900
Balance as of December 31, 2019																			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	Exercise of stock options	609	—		—	—		556	—		3,664		—		—		3,664		Exercise of stock options		148		—		—		—		136	—		517		—		—			517
Shares withheld in consideration of employee tax obligations relative to stock-based compensation arrangements	Shares withheld in consideration of employee tax obligations relative to stock-based compensation arrangements	(65)	—		—	—		(78)	—		—		(2,781)		—		(2,781)		Shares withheld in consideration of employee tax obligations relative to stock-based compensation arrangements		(1)		—		—		—		(262)	—		—		(3,954)		—			(3,954)
Issuance of Class A Common Stock, net of forfeitures	Issuance of Class A Common Stock, net of forfeitures	898	—		—	—		—	—		—		—		—		—		Issuance of Class A Common Stock, net of forfeitures		166		—		—		—		—	—		—		—		—			—
Issuance of Class C Common Stock, net of forfeitures	Issuance of Class C Common Stock, net of forfeitures	—	—		—	—		1,723	1		7,852		—		—		7,853		Issuance of Class C Common Stock, net of forfeitures		—		—		—		—		3,052	1		4,225		—		—			4,226
Impact of adoption of accounting standard updates		—	—		—	—		—	—		(2,666)		(23,932)		—		(26,598)
Equity component value of convertible note issuance, net																			Equity component value of convertible note issuance, net		—		—		—		—		—	—		40,644		—		—			40,644
Stock-based compensation expense	Stock-based compensation expense	—	—		—	—		—	—		39,932		—		—		39,932		Stock-based compensation expense		—		—		—		—		—	—		42,070		—		—			42,070
Comprehensive income (loss)	Comprehensive income (loss)	—	—		—	—		—	—		—		(48,260)		13,932		(34,328)		Comprehensive income (loss)		—		—		—		—		—	—		—		(549,177)		(8,420)			(557,597)
Balance as of December 31, 2017		185,257	$	61	34,450	$	11	222,375	$	74	$	872,266	$	1,184,441	$	(38,211)	$	2,018,642
Exercise of stock options and warrants		2,084	1		—	—		2,127	—		6,747		—		—		6,748
Shares withheld in consideration of employee tax obligations relative to stock-based compensation arrangements		(23)	—		—	—		(140)	—		—		(2,564)		—		(2,564)
Issuance of Class A Common Stock, net of forfeitures		392	—		—	—		—	—		—		—		—		—
Issuance of Class C Common Stock, net of forfeitures		—	—		—	—		2,060	1		(4,168)		—		—		(4,167)
Impact of adoption of accounting standard updates		—	—		—	—		—	—		—		3,507		—		3,507
Stock-based compensation expense		—	—		—	—		—	—		41,783		—		—		41,783
Comprehensive loss		—	—		—	—		—	—		—		(46,302)		(776)		(47,078)
Balance as of December 31, 2018		187,710	$	62	34,450	$	11	226,422	$	75	$	916,628	$	1,139,082	$	(38,987)	$	2,016,871
Balance as of December 31, 2020																			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	Exercise of stock options	441	—		—	—		293	—		2,101		—		—		2,101		Exercise of stock options		6		—		—		—		7	—		23		—		—			23
Shares withheld in consideration of employee tax obligations relative to stock-based compensation arrangements	Shares withheld in consideration of employee tax obligations relative to stock-based compensation arrangements	(15)	—		—	—		(227)	—		—		(4,235)		—		(4,235)		Shares withheld in consideration of employee tax obligations relative to stock-based compensation arrangements		—		—		—		—		(291)	—		—		(6,082)		—			(6,082)
Issuance of Class A Common Stock, net of forfeitures	Issuance of Class A Common Stock, net of forfeitures	154	—		—	—		—	—		—		—		—		—		Issuance of Class A Common Stock, net of forfeitures		42		1		—		—		—	—		—		—		—			1
Issuance of Class C Common Stock, net of forfeitures	Issuance of Class C Common Stock, net of forfeitures	—	—		—	—		2,540	1		5,370		—		—		5,371		Issuance of Class C Common Stock, net of forfeitures		—		—		—		—		21,491	7		3,623		—		—			3,630
Stock-based compensation expense	Stock-based compensation expense	—	—		—	—		—	—		49,618		—		—		49,618		Stock-based compensation expense		—		—		—		—		—	—		43,794		—		—			43,794
Comprehensive income (loss)	Comprehensive income (loss)	—	—		—	—		—	—		—		92,139		(11,778)		80,361		Comprehensive income (loss)		—		—		—		—		—	—		—		360,060		11,575			371,635
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
Balance as of December 31, 2021																			Balance as of December 31, 2021		188,651		$	63	34,450		$	11	253,161	$	84	$	1,108,613	$	1,027,833	$	(47,610)		$	2,088,994
Adoption of ASU 2020-06																			Adoption of ASU 2020-06		—		—		—		—		—	—		(14,351)		5,144		—			(9,207)

Shares withheld in consideration of employee tax obligations relative to stock-based compensation arrangements																			Shares withheld in consideration of employee tax obligations relative to stock-based compensation arrangements		—		—		—		—		—	—		—		(11,446)		—			(11,446)
Class C Common Stock repurchased																			Class C Common Stock repurchased		—		—		—		—		(16,151)	(5)		(60,000)		(239,995)		—			(300,000)
Issuance of Class A Common Stock, net of forfeitures																			Issuance of Class A Common Stock, net of forfeitures		18		—		—		—		—	—		—		—		—			—
Issuance of Class C Common Stock, net of forfeitures																			Issuance of Class C Common Stock, net of forfeitures		—		—		—		—		1,462	—		935		—		—			935
Stock-based compensation expense																			Stock-based compensation expense		—		—		—		—		—	—		11,764		—		—			11,764
Comprehensive income (loss)																			Comprehensive income (loss)		—		—		—		—		—	—		—		(59,610)		7,524			(52,086)
Balance as of March 31, 2022																			Balance as of March 31, 2022		188,669		$	63	34,450		$	11	238,472	$	79	$	1,046,961	$	721,926	$	(40,086)		$	1,728,954
Exercise of stock options																			Exercise of stock options		—		—		—		—		—	—		—		—		—			—
Shares withheld in consideration of employee tax obligations relative to stock-based compensation arrangements																			Shares withheld in consideration of employee tax obligations relative to stock-based compensation arrangements		—		—		—		—		—	—		—		(5,151)		—			(5,151)
Class C Common Stock repurchased																			Class C Common Stock repurchased		—		—		—		—		(18,725)	(6)		48,988		(173,982)		—			(125,000)
Issuance of Class A Common Stock, net of forfeitures																			Issuance of Class A Common Stock, net of forfeitures		36		—		—		—		—	—		—		—		—			—
Issuance of Class C Common Stock, net of forfeitures																			Issuance of Class C Common Stock, net of forfeitures		—		—		—		—		1,600	—		3,776		—		—			3,776
Stock-based compensation expense																			Stock-based compensation expense		—		—		—		—		—	—		36,811		—		—			36,811
Comprehensive income (loss)																			Comprehensive income (loss)		—		—		—		—		—	—		—		386,769		(27,756)			359,013
Balance as of March 31, 2023																			Balance as of March 31, 2023		188,705		$	63	34,450		$	11	221,347	$	73	$	1,136,536	$	929,562	$	(67,842)		$	1,998,403


Reconciliation of cash, cash equivalents and restricted cash	March 31, 2023		March 31, 2022		December 31, 2021		December 31, 2020
Cash and cash equivalents	$	711,910	$	1,009,139	$	1,669,453	$	1,517,361
Restricted cash	15,816		12,987		13,417		11,154
Total cash, cash equivalents and restricted cash	$	727,726	$	1,022,126	$	1,682,870	$	1,528,515


~~ITEM 1.~~			ITEM 1. BUSINESS


~~ITEM 1A.~~			ITEM 1A. RISK FACTORS


	Year Ended December 31,
(In thousands)	2018		2017		$ Change		% Change
Apparel	$	3,464,120	$	3,284,652	$	179,468	5.5	%
Footwear	1,063,175		1,037,840		25,335		2.4
Accessories	422,496		445,838		(23,342)		(5.2)
Net Sales	4,949,791		4,768,330		181,461		3.8
License revenues	124,785		116,575		8,210		7.0
Connected Fitness	120,357		101,870		18,487		18.1
Corporate Other (1)	(1,748)		2,469		(4,217)		(170.8)
Total net revenues	$	5,193,185	$	4,989,244	$	203,941	4.1	%


			Years
Furniture, fixtures and displays, office equipment, software and plant equipment (1)			3 to 10
Site improvements, buildings and building equipment			10 to 35
Leasehold and tenant improvements			Shorter of the remaining lease term or related asset life


	As of March 31, 2023		As of March 31, 2022		As of December 31, 2021
Accrued compensation and benefits	$	66,742	$	69,361	$	151,887
Accrued marketing	39,832		41,854		58,754
Accrued royalties	25,415		17,262		16,386
Accrued taxes	26,297		20,055		35,588
Forward currency contract liabilities	28,067		12,303		13,193
Other	168,290		157,128		184,357
Total Accrued Expenses	$	354,643	$	317,963	$	460,165


(In thousands)	Year Ended December 31, 2018		Year Ended December 31, 2017
Costs recorded in cost of goods sold:
Inventory write-offs	$	20,800	$	5,077
Total cost recorded in cost of goods sold	20,800		5,077

Costs recorded in restructuring and impairment charges:
Property and equipment impairment	12,146		30,677
Intangible asset impairment	—		12,054
Goodwill impairment	—		28,647
Employee related costs	9,949		14,572
Contract exit costs	114,126		12,029
Other restructuring costs	46,928		26,070
Total costs recorded in restructuring and impairment charges	183,149		124,049
Total restructuring, impairment and restructuring related costs	$	203,949	$	129,126


	Allowance for doubtful accounts - within accounts receivable, net		Allowance for doubtful accounts - within prepaid expenses and other current assets (1)
Balance as of December 31, 2020	$	20,350	$	7,029
Increases (decreases) to costs and expenses	(3,821)		—
Write-offs, net of recoveries	(9,401)		—
Balance as of December 31, 2021	$	7,128	$	7,029
Increases (decreases) to costs and expenses	(36)		—
Write-offs, net of recoveries	21		—
Balance as of March 31, 2022	$	7,113	$	7,029
Increases (decreases) to costs and expenses	5,193		—
Write-offs, net of recoveries	(1,493)		(6,802)
Balance as of March 31, 2023	$	10,813	$	227


		December 31,							As of March 31, 2023		As of March 31, 2022		As of December 31, 2021
(In thousands)		2019		2018
Leasehold and tenant improvements	Leasehold and tenant improvements	$	563,061	$	446,330	Leasehold and tenant improvements	$	462,721	$	461,394	$	462,588
Furniture, fixtures and displays	Furniture, fixtures and displays	235,721		218,930		Furniture, fixtures and displays	289,539		263,749		259,534
Buildings	Buildings	52,184		48,230		Buildings	48,632		48,382		48,382
Software	Software	337,577		286,014		Software	380,586		339,722		333,560
Office equipment	Office equipment	126,412		121,202		Office equipment	132,301		132,452		132,629
Plant equipment	Plant equipment	144,844		138,867		Plant equipment	178,194		178,188		178,187
Land	Land	83,626		83,626		Land	83,626		83,626		83,626
Construction in progress		54,771		136,916
Construction in progress (1)						Construction in progress (1)	143,243		64,869		52,598
Other	Other	4,071		2,348		Other	17,837		5,751		5,545
Subtotal property and equipment	Subtotal property and equipment	1,602,267		1,482,463		Subtotal property and equipment	1,736,679		1,578,133		1,556,649
Accumulated depreciation	Accumulated depreciation	(810,119)		(655,595)		Accumulated depreciation	(1,063,943)		(976,768)		(949,423)
Property and equipment, net	Property and equipment, net	$	792,148	$	826,868	Property and equipment, net	$	672,736	$	601,365	$	607,226


(In thousands)	North America		EMEA		Asia-Pacific		Latin America		Connected Fitness		Total
Balance as of December 31, 2017	$	318,455	$	111,155	$	81,323	$	44,741	$	—	$	555,674
Effect of currency translation adjustment	(955)		(6,332)		(1,913)		20		—		$	(9,180)
Balance as of December 31, 2018	317,500		104,823		79,410		44,761		—		546,494
Effect of currency translation adjustment	788		1,243		(242)		1,895		—		3,684
Balance as of December 31, 2019	$	318,288	$	106,066	$	79,168	$	46,656	$	—	$	550,178


(In thousands)
2020	$	6,870
2021	6,582
2022	6,332
2023	5,690
2024	5,341
2025 and thereafter	1,056
Amortization expense of intangible assets	$	31,871


	Year Ended March 31, 2023		Three Months Ended March 31, 2022 (Transition Period)		Year Ended December 31, 2021		Year Ended December 31, 2020
Operating lease costs	$	148,760	$	36,699	$	142,965	$	147,390
Variable lease costs	$	14,177	$	3,759	$	16,115	$	9,293


	~~December 31, 2019~~
~~Weighted average remaining lease term (in years)~~	~~6.73~~
~~Weighted average discount rate~~	~~4.26~~	%


~~(In thousands)~~	Year ended December 31, 2019
~~Cash paid for amounts included in the measurement of lease liabilities~~
~~Operating cash outflows from~~Maturity of Lease Liabilities The following table presents the future minimum lease payments under the Company's operating ~~leases~~	$	~~116,811~~
~~Leased assets obtained in exchange for new operating lease liabilities~~	$	~~70,075~~


(In thousands)
2020	$	152,920
2021	136,219
2022	123,477
2023	109,053
2024	92,000
2025 and thereafter	209,492
Total lease payments	$	823,161
Less: Interest	116,626
Total present value of lease liabilities	$	706,535


Fiscal year ending March 31,
2024	$	175,002
2025	160,326
2026	127,319
2027	107,147
2028	89,890
2029 and thereafter	355,135
Total lease payments	$	1,014,819
Less: Interest	168,116
Total present value of lease liabilities	$	846,703


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


(In thousands)
2019	$	142,648
2020	148,171
2021	154,440
2022	141,276
2023	128,027
2024 and thereafter	699,262
Total future minimum lease payments	$	1,413,824


	Useful Lives from Date of Acquisitions (in years)	As of December 31, 2021
		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Intangible assets subject to amortization:
Technology	5-7	$	2,536	$	(2,003)	$	533
Customer relationships	2-6	8,567		(2,552)		6,015
Lease-related intangible assets	1-15	8,852		(8,602)		250
Other	5-10	475		(415)		60
Total		$	20,430	$	(13,572)	$	6,858
Indefinite-lived intangible assets						4,152
Intangible assets, net						$	11,010


Fiscal year ending March 31,
2024	$	1,561
2025	1,522
2026	1,397
2027	9
2028 and thereafter	—
Total amortization expense of intangible assets	$	4,489


(In thousands)
2020	$	131,297
2021	114,407
2022	105,255
2023	99,260
2024	87,536
2025 and thereafter	141,354
Total future minimum sponsorship and other payments	$	679,109


Options Outstanding										Options Exercisable
Number of Underlying Shares	Weighted Average Exercise Price Per Share		Weighted Average Remaining Contractual Life (Years)	Total Intrinsic Value		Number of Underlying Shares	Weighted Average Exercise Price Per Share		Weighted Average Remaining Contractual Life (Years)	Total Intrinsic Value
1,969	$	16.61	6.19	$	9,379	913	$	15.45	3.66	$	7,725


(In thousands)	Balance as of December 31, 2018		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 December 31, 2019
Derivatives designated as cash flow hedges
Foreign currency contracts	$	21,908	$	(3,550)	$	24,363	$	(6,005)
Interest rate swaps	954		67		1,598		(577)
Total designated as cash flow hedges	$	22,862	$	(3,483)	$	25,961	$	(6,582)


	Balance as of March 31, 2022		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 March 31, 2023
Derivatives designated as cash flow hedges
Foreign currency contracts	$	41	$	41,703	$	46,508	$	(4,764)
Interest rate swaps	(495)		—		(37)		(458)
Total designated as cash flow hedges	$	(454)	$	41,703	$	46,471	$	(5,222)