Company: UAA
Filing Date: 2025-11-06
Form Type: 10-Q
Source: 0001336917-25-000198
Chunk: 43

Company: Under Armour, Inc.
Filing Date: 2025-11-06
Form: 10-Q
Item: Part I, Item 1
Chunk 43
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 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 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 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. While the Company is continuing to assess the impact of the legislation, it did not have a material impact to the Company’s financial statements for the three and six months ended September 30, 2025.Valuation AllowanceThe Company evaluates on a quarterly basis whether the deferred tax assets are realizable which requires significant judgment. The Company considers 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 could affect its