Company: UAA
Filing Date: 2025-08-08
Form Type: 10-Q
Source: 0001336917-25-000136
Chunk: 108

Company: Under Armour, Inc.
Filing Date: 2025-08-08
Form: 10-Q
Item: Part I, Item 8
Chunk 108
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 total notional value of the Company's outstanding undesignated derivative instruments was $514.5 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 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.The effective rates for income taxes were 49.0% and (1.7)% for the three months ended June 30, 2025 and 2024, respectively. The increase in the Company's effective tax rate was primarily driven by year over year changes in actual and forecasted annual pre-tax earnings, partially offset by the impact of discrete items as a percentage of the pre-tax results in each period.The United States enacted the budget reconciliation H.R. 1, referred to as One Big Beautiful Bill Act (“OBBBA”) on July 4, 2025. The OBBBA includes a broad range of tax reform provisions, including modifications to U.S. taxation on foreign earnings, the restoration of bonus depreciation and research expensing and other U.S. corporate tax provisions. The Company is currently assessing the impact of the legislation.Valuation AllowanceThe Company evaluates on a quarterly basis whether the deferred tax assets are realizable which requires significant judgment. The Company considers all available positive and negative evidence, including historical operating performance and expectations of future operating performance. To the extent the Company believes it is more likely than not that all or some portion of the asset will not be realized, valuation allowances are established against the Company's deferred tax assets, which increase income tax expense in the period when such a determination is made.As of each reporting date, management considers new evidence, both positive and negative, that