Company: UAA
Filing Date: 2025-11-06
Form Type: 10-Q
Source: 0001336917-25-000198
Chunk: 114

Company: Under Armour, Inc.
Filing Date: 2025-11-06
Form: 10-Q
Item: Part I, Item 8
Chunk 114
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5, the total notional value of the Company's outstanding undesignated derivative instruments was $406.5 million (March 31, 2025: $450.7 million).Credit RiskThe Company enters into derivative contracts with major financial institutions with investment grade credit ratings and is exposed to credit losses in the event of non-performance by these financial institutions. This credit risk is generally limited to the unrealized gains in the derivative contracts. However, the Company monitors the credit quality of these financial institutions and considers the risk of counterparty default to be minimal.

NOTE 15. PROVISION FOR INCOME TAXESThe Company generally computes its quarterly income tax provision under the effective tax rate method by applying an estimated anticipated annual effective rate to the Company's year-to-date earnings, except for significant and unusual or extraordinary transactions. Losses from jurisdictions for which no benefit can be recognized are excluded from the overall computations of the estimated annual effective tax rate and a separate estimated annual effective tax rate is computed and applied to earnings in the loss jurisdiction. Income tax provision for any significant and unusual or extraordinary transactions are computed and recorded in the period in which the specific transaction occurs.In instances where the estimated anticipated annual effective tax rate is hypersensitive to changes in forecasted annual pre-tax earnings, it can result in the annual effective tax rate method being deemed unreliable for quarterly financial reporting purposes. When this occurs, a discrete tax computation based on actual year-to-date results is the most appropriate method for computing income tax expense. For the three and six months ended September 30, 2025, the Company concluded that a discrete computation of its tax expense was the most appropriate method. For the comparable three and six months ended September 30, 2024, the Company computed tax expense under the annual effective tax rate method.The effective rates for income taxes were 345.9% and (1.3)% for the three months ended September 30, 2025 and 2024, respectively. The increase in the Company's effective tax rate was primarily driven by year over 

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year changes in actual and forecasted pre-tax earnings, the impact of U.S taxation of foreign earnings, increased global minimum taxes and valuation allowances on increased U.S. interest expense carryforwards.The effective rates for income taxes were 1,121.3% and (2.3)% for the six months ended September 30, 2025 and 2024, respectively. The increase in the Company's effective tax rate was primarily driven by year over year changes in actual