Under Armour Inc. Annual Report 2011

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FY2011 Annual Report · Under Armour Inc.

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2011 UNDER ARMOUR ANNUAL REPORT

N
O
S
V
A
U

NET REVENUES
IN THOUSANDS; YEAR 2007–2011

NET REVENUES BY DISTRIBUTION
YEAR 2011

$606,561

$725,244

$856,411

$1,063,927

$1,472,684

’07

’08

’09

’10

’11

5-YEAR COMPOUND ANNUAL GROWTH RATE* 27.9%

* Based on ﬁ scal year 2006 net revenues of $430,689

WHOLESALE
DIRECT TO CONSUMER
LICENSING

70.5%
27.0%
2.5%

The idea behind Under Ar-
mour’s ﬁ rst product–the
0039 compression shirt–
was born on a football ﬁ eld.
Since that ﬁ rst innovation,
we have graded ourselves
as they do on the ﬁ eld of
play by that most irrefut-
able and unforgiving of
metrics: the scoreboard.

We put some big points on the board in 2011,
with a net revenue increase for the year of 38
percent, our strongest growth rate since 2007.
We added over $400 million in net revenue
in 2011, essentially doubling the size of our
business since 2008. From a proﬁ tability per-
spective, we leveraged that strong net revenue
growth despite gross margin pressure to deliver
an operating proﬁ t growth rate of 45 percent.

Having now been a public company for over
six years, we think it’s fair to examine what
we have accomplished for our shareholders
during that time. Back in 2005 we were a
$281 million dollar company with 600 em-
ployees. We were just getting our feet wet
internationally, the roster of UA athletes was
fairly narrow, we had ﬁ ve Factory House® out-
let stores, and we hadn’t made our ﬁ rst shoe.

Fast forward to 2011 and we have added
well over $1 billion in net revenues and we
employ 5,400 people globally. We opened
our ﬁ rst store in China in May, and we are
partnered with some of the greatest athletes
of this generation and the next, like Patriots
QB Tom Brady and NFL Offensive Rookie
of the Year Cam Newton. We ended the year

with 80 Factory House outlet stores in the
U.S. and our footwear business topped the
$180 million mark.

While our success started on the American
football ﬁ eld, we recognize that the lion’s
share of our growth moving forward will
come from categories and geographies beyond
our core. So I’m very proud
to say that 2011 was a great
illustration of our team tak-
ing a strong step beyond our
core business and bringing
our Brand of innovation to
a much broader audience
of athletes. Our 2011 results are a clear indi-
cation that we continue to resonate with our
consumer through product, design, and the
relentless pursuit of innovation to make all
athletes better.

As we enter 2012, we will continue to move
beyond our core compression heritage while
maintaining the most authentic and proﬁ table
position in that space. In addition, we will
continue to leverage our premium brand posi-
tion to greatly expand our addressable market.

A major step in that direction came with our
introduction in 2011 of the Charged Cotton®
platform. It’s not that we didn’t like cotton,
we just didn’t like the way it performed. So
we did something about it and in 2011 we
redeﬁ ned what athletes have come to expect
from their apparel.

While our ﬁ rst $1 billion in net revenues was
built largely on synthetic materials, we see
Charged Cotton as a path to nearly quadru-
pling our addressable market in “active use”

apparel, while blurring the lines of the much
larger activewear market over time.

Our initial launch of Charged Cotton in the
spring was a big success and we followed
quickly in the fall with our UA Storm prod-
uct, the next innovation in our Charged Cot-
ton platform. Storm is truly the next genera-
tion of protection–we’ve
taken the classic cotton
sweatshirt with its heavy-
weight feel and made it
water-resistant so water
rolls right off. With our
reinvention of the hoody,
we again made our Brand more accessible to
a broader audience of athletes.

Our relentless pursuit of Under Armour inno-
vation–the type that changes the way an ath-
lete uses a product–was on display throughout
2011. As the thought leaders in the category,
we debuted the most advanced biometric and
athletic performance monitor in use today,
the E39™ shirt. Sensors in a compression shirt
detect, evaluate and communicate biometric
data at up to 100 times per second. Algo-
rithms then dissect this data to provide spe-
ciﬁ c and precise information about an athlete
that is relevant to the sport or activity.

In footwear, we made progress in 2011 with
products like the UA Charge RC, a light-
weight running shoe that truly captures the
Under Armour DNA and helps establish our
authenticity in this competitive category.

Our business outside North America grew 35
percent in 2011 as we continue to introduce
the UA Brand to new consumers around the

INCOME FROM OPERATIONS
IN THOUSANDS; YEAR 2007–2011

NET REVENUES BY PRODUCT
CATEGORY YEAR 2011

WE ADDED OVER $400 MILLION IN

REVENUE IN 2011, ESSENTIALLY

DOUBLING THE SIZE OF OUR

BUSINESS SINCE 2008.

$86,265

$76,925

$85,273

$112,355

$162,767

’07

’08

’09

’10

’11

5-YEAR COMPOUND ANNUAL GROWTH RATE* 23.4%

* Based on ﬁ scal year 2006 income from operations of $56,918

APPAREL
FOOTWEAR
ACCESSORIES
LICENSING REVENUES

76.2%
12.3%
9.0%
2.5%

globe. In my view, the most inspiring perfor-
mance came from our long-time licensing part-
ners in Japan, Dome Corporation, who reacted
strongly following the devastating effects of
the tsunami that hit in March. The team de-

livered approximately 40 percent net revenue
growth in 2011, generating wholesale sales of
our products in Japan of nearly $150 million.

In May, we opened the ﬁ rst UA retail pres-
ence in China–a shop-in-shop store in the
Grand Gateway Mall in Shanghai. The op-
portunity for Under Armour in China is sub-
stantial, with the sportswear market expected
to grow from about $13 billion in 2010 to
$30 billion by the end of 2013. This store
will provide us with great learnings about
the Chinese athletic consumer and is the ﬁ rst
step in our long-term mission to be successful
in this rapidly growing market.

As we move forward into 2012, we’re looking
forward to the ofﬁ cial start of our partner-
ship with Tottenham Hotspur Football Club
of the English Premier League. Based in
London, Tottenham is one of England’s most
storied clubs with more than 20 million fans
around the world. With a global audience of
over 4 billion people, the English Premier

League provides us with a truly global stage
to bring our innovative products to the world
of football (soccer).

A key growth driver for us in 2011 was our
Direct-to-Consumer business, consisting of
our Factory House and specialty stores and our
global e-commerce business. Direct-to-Con-
sumer net revenues grew 62 percent in 2011
and represented 27 percent of total net reve-
nues for the year. We initiated a major upgrade
to the UA.com e-commerce site toward the end
of the year that will help drive further growth
in 2012 and beyond. We’re able to merchandise
the full breadth of the UA product
line through our e-commerce plat-
form, a critical element as we intro-
duce new consumers to the Brand
every day and expand the closet with
our existing consumers.

In 2011, we made great progress
in expanding our reach and we’re
conﬁ dent in taking that next step
outside our core to drive growth
in 2012.

It took us 15 years to get UA to the ﬁ rst bil-
lion in net revenue, a feat we accomplished
in 2010. We did it through focus, innovation
and investing so that when we hit that $1 bil-
lion mark we wouldn’t stall like many others
do upon reaching that level.

At our Investor Day in June 2011, we set a new
goal to double our net revenues by 2013, with
a 2013 net revenue target of over $2.1 billion.
Importantly, we plan to reach that goal while
accomplishing two other critical things as
well–we will show operating leverage and we

will continue to invest to ensure our growth
remains strong in 2014 and beyond.

Lastly, we completed the purchase of our glob-
al corporate headquarters here in Baltimore
in 2011. This is our present and future house,
the foundation from which we will execute
against the promise of what we have built to
date. We invested our capital here because
this is the house from which we will create our
deﬁ ning product, from which we will become
thought leaders in the footwear business, and
the house from which our global status as the
world’s next great athletic brand will emanate.

Our success as a brand to date has come from
remaining humble about our accomplish-
ments and hungry to execute against new
opportunities. We will remain focused on
those principles in 2012 and beyond to drive
growth and deliver on our promise. We will
Protect This House!

Humble & Hungry,

Kevin A. Plank
Chairman, CEO & President

UA CHARGE RC STORM

By combining our signature apparel-

based advantages with our latest footwear

innovations, we’ve delivered our most

technical running shoe ever. With an

extremely lightweight, water-resistant

upper and a super-thin layer of ultra-
responsive Micro G® cushioning, the UA
Charge RC Storm makes runners better no

matter how bad the weather gets.

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

Form 10-K

(Mark One)
Í ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES

EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2011

‘ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES

EXCHANGE ACT OF 1934
For the transition period from

Commission File No. 001-33202

UNDER ARMOUR, INC.

(Exact name of registrant as specified in its charter)

Maryland
(State or other jurisdiction of
incorporation or organization)
1020 Hull Street
Baltimore, Maryland 21230
(Address of principal executive offices) (Zip Code)

52-1990078
(I.R.S. Employer
Identification No.)

(410) 454-6428
(Registrant’s Telephone Number, Including Area Code)

Securities registered pursuant to Section 12(b) of the Act:

Class A Common Stock
(Title of each class)

New York Stock Exchange
(Name of each exchange on which registered)

Securities registered pursuant to Section 12(g) of the Act:
None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities

Act. Yes Í No ‘

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the

Act. Yes ‘ No Í

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes Í No ‘

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every
Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§229.405 of this chapter) during
the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files. Yes Í No ‘
Indicate by check mark if the disclosure of delinquent filers pursuant to Item 405 or Regulation S-K (§229.405 of this chapter)

is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ‘

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a
smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in
Rule 12b-2 of the Exchange Act.
Large accelerated filer Í
Non-accelerated filer ‘ (Do not check if a smaller reporting company)
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ‘ No Í
As of June 30, 2011, the last business day of our most recently completed second fiscal quarter, the aggregate market value of

Accelerated filer ‘
Smaller reporting company ‘

the registrant’s Class A Common Stock held by non-affiliates was $2,854,001,980.

As of January 31, 2012, there were 40,515,652 shares of Class A Common Stock and 11,250,000 shares of Class B Convertible

Common Stock outstanding.

DOCUMENTS INCORPORATED BY REFERENCE
Portions of Under Armour, Inc.’s Proxy Statement for the Annual Meeting of Stockholders to be held on May 1, 2012 are

incorporated by reference in Part III of this Form 10-K.

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UNDER ARMOUR, INC.

ANNUAL REPORT ON FORM 10-K
TABLE OF CONTENTS

PART I.

Item 1.

Business

General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Products . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Marketing and Promotion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Sales and Distribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Seasonality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Product Design and Development
Sourcing, Manufacturing and Quality Assurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Inventory Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Intellectual Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Competition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Employees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Available Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 1A. Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 1B. Unresolved Staff Comments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 2.
Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 3.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Executive Officers of the Registrant
Item 4. Mine Safety Disclosures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

PART II.

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases

of Equity Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Selected Financial Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 6.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations . .
Item 7A. Quantitative and Qualitative Disclosures About Market Risk . . . . . . . . . . . . . . . . . . . . . . . . . .
Financial Statements and Supplementary Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 8.
Changes in and Disagreements With Accountants on Accounting and Financial
Item 9.

Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 9A. Controls and Procedures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 9B. Other Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

PART III.

Item 10. Directors, Executive Officers and Corporate Governance . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 11. Executive Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder
Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 13. Certain Relationships and Related Transactions, and Director Independence . . . . . . . . . . . . . .
Item 14. Principal Accountant Fees and Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

PART IV.

Item 15. Exhibits and Financial Statement Schedules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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ITEM 1. BUSINESS

General

PART I

Our principal business activities are the development, marketing and distribution of branded performance

apparel, footwear and accessories for men, women and youth. The brand’s moisture-wicking fabrications are
engineered in many designs and styles for wear in nearly every climate to provide a performance alternative to
traditional products. Our products are sold worldwide and are worn by athletes at all levels, from youth to
professional, on playing fields around the globe, as well as by consumers with active lifestyles.

Our net revenues are generated primarily from the wholesale distribution of our products to national,
regional, independent and specialty retailers. We also generate net revenue from product licensing and from the
sale of our products through our direct to consumer sales channel, which includes sales through our factory house
and specialty stores and websites. Our products are offered in over twenty five thousand retail stores worldwide.
A large majority of our products are sold in North America; however we believe that our products appeal to
athletes and consumers with active lifestyles around the globe. Internationally, we sell our products in certain
countries in Europe, a third party licensee sells our products in Japan, and distributors sell our products in other
foreign countries. In addition, we opened our first store in China in 2011. We plan to continue to grow our
business over the long term through increased sales of our apparel, footwear and accessories, expansion of our
wholesale distribution, growth in our direct to consumer sales channel and expansion in international markets.
Virtually all of our products are manufactured by unaffiliated manufacturers operating in 16 countries outside of
the United States.

We were incorporated as a Maryland corporation in 1996. As used in this report, the terms “we,” “our,”
“us,” “Under Armour” and the “Company” refer to Under Armour, Inc. and its subsidiaries unless the context
indicates otherwise. We have registered trademarks around the globe, including UNDER ARMOUR®,
HEATGEAR®, COLDGEAR®, ALLSEASONGEAR® and the Under Armour UA Logo, and we have applied to
register many other trademarks. This Annual Report on Form 10-K also contains additional trademarks and
tradenames of our Company. All trademarks and tradenames appearing in this Annual Report on Form 10-K are
the property of their respective holders.

Products

Our product offerings consist of apparel, footwear and accessories for men, women and youth. We market

our products at multiple price levels and provide consumers with products that we believe are a superior
alternative to traditional athletic products. In 2011, sales of apparel, footwear and accessories represented 76%,
12% and 9% of net revenues, respectively. Licensing arrangements for the sale of our products represented the
remaining 3% of net revenues. Refer to Note 16 to the Consolidated Financial Statements for net revenues by
product.

Apparel

Our apparel is offered in a variety of styles and fits intended to enhance comfort and mobility, regulate body

temperature and improve performance regardless of weather conditions. Our apparel is engineered to replace
traditional non-performance fabrics in the world of athletics and fitness with performance alternatives designed
and merchandised along gearlines. Our three gearlines are marketed to tell a very simple story about our highly
technical products and extend across the sporting goods, outdoor and active lifestyle markets. We market our
apparel for consumers to choose HEATGEAR® when it is hot, COLDGEAR® when it is cold and
ALLSEASONGEAR® between the extremes. Within each gearline our apparel comes in three primary fit types:
compression (tight fit), fitted (athletic fit) and loose (relaxed).

HEATGEAR® is designed to be worn in warm to hot temperatures under equipment or as a single layer. Our

first compression T-shirt was the original HEATGEAR® product and remains one of our signature styles. While
a sweat-soaked traditional non-performance T-shirt can weigh two to three pounds, HEATGEAR® is engineered
with a microfiber blend designed to wick moisture from the body which helps the body stay cool, dry and light.
We offer HEATGEAR® in a variety of tops and bottoms in a broad array of colors and styles for wear in the gym
or outside in warm weather.

Because athletes sweat in cold weather as well as in the heat, COLDGEAR® is designed to wick moisture

from the body while circulating body heat from hot spots to help maintain core body temperature. Our
COLDGEAR® apparel provides both dryness and warmth in a single light layer that can be worn beneath a
jersey, uniform, protective gear or ski-vest, and our COLDGEAR® outerwear products protect the athlete, as well
as the coach and the fan from the outside in. Our COLDGEAR® products generally sell at higher prices than our
other gearlines.

ALLSEASONGEAR® is designed to be worn in changing temperatures and uses technical fabrics to keep

the wearer cool and dry in warmer temperatures while preventing a chill in cooler temperatures.

Footwear

We began offering footwear for men, women and youth in 2006, and each year we have expanded our
footwear offerings. Our footwear offerings include football, baseball, lacrosse, softball and soccer cleats, slides,
performance training footwear, running footwear, basketball footwear and new in 2011, hunting boots. Our
footwear is light, breathable and built with performance attributes for athletes. Our footwear is designed with
innovative technologies which provide stabilization, directional cushioning and moisture management
engineered to maximize the athlete’s comfort and control.

Accessories

During 2011, we began selling hats and bags in house. Previously these products were sold by one of our
licensees. In addition, our accessories include baseball batting, football, golf and running gloves. Our accessories
include HEATGEAR® and COLDGEAR® technologies and are designed with advanced fabrications to provide
the same level of performance as our other products. Net revenues generated from the sale of gloves, and
beginning in 2011, from the sale of hats and bags, are included in our accessories category.

We also have agreements with our licensees to develop Under Armour accessories. Our product, marketing
and sales teams are actively involved in all steps of the design process in order to maintain brand standards and
consistency. During 2011, our licensees offered socks, team uniforms, baby and kids’ apparel, eyewear and
custom-molded mouth guards that feature performance advantages and functionality similar to our other product
offerings. License revenues generated from the sale of these accessories are included in our net revenues.

Marketing and Promotion

We currently focus on marketing and selling our products to consumers primarily for use in athletics,

fitness, training and outdoor activities. We seek to drive consumer demand by building brand equity and
awareness that our products deliver advantages that help athletes perform better.

Sports Marketing

Our marketing and promotion strategy begins with selling our products to high-performing athletes and

teams on the high school, collegiate and professional levels. We execute this strategy through outfitting
agreements, professional and collegiate sponsorships, individual athlete agreements and by selling our products
directly to team equipment managers and to individual athletes. As a result, our products are seen on the field,

giving them exposure to various consumer audiences through the internet, television, magazines and live at
sporting events. This exposure to consumers helps us establish on-field authenticity as consumers can see our
products being worn by high-performing athletes.

We are the official outfitter of athletic teams in several high-profile collegiate conferences, and since 2006

we have been an official supplier of footwear to the National Football League (“NFL”). In 2010, we signed an
agreement to become an official supplier of gloves to the NFL beginning in 2011 and we are the official combine
scouting partner to the NFL with the right to sell combine training apparel beginning in 2012. In addition, in
2011 we became the Official Performance Footwear Supplier of Major League Baseball, as well as becoming a
partner with the National Basketball Association (“NBA”) which allows us to market our NBA athletes in game
uniforms in connection with our basketball footwear starting with the 2011/2012 season.

Internationally, we are selling our products to European soccer and rugby teams. Beginning with the 2012

season, we will provide the Tottenham Hotspur Football Club with performance apparel, including training wear
and playing kit for the Club’s First and Academy teams, together with replica product for the Club’s supporters
around the world. We’re the official technical kit supplier to the Welsh Rugby Union and have exclusive retail
rights on the replica products.

We also seek to sponsor events to drive awareness and brand authenticity from a grassroots level. We host

combines, camps and clinics for many sports at regional sites across the country for male and female athletes.
These events, along with the products we make, are designed to help young athletes improve their training
methods and their overall performance. We are also the title sponsor of a collection of high school All-America
Games that create significant on-field product and brand exposure that contributes to our on-field authenticity.

Media

We feature our products in a variety of national digital, broadcast, and print media outlets. We also utilize

social marketing to engage consumers and promote conversation around our brand and our products. In 2011, we
significantly grew our “fan base” via social sites like Facebook and Twitter, surpassing the million-fan mark and
bringing attention to our most compelling brand stories.

Retail Presentation

The primary component of our retail marketing strategy is to increase and brand floor space dedicated to our

products within our major retail accounts. The design and funding of Under Armour concept shops within our
major retail accounts has been a key initiative for securing prime floor space, educating the consumer and
creating an exciting environment for the consumer to experience our brand. Under Armour concept shops
enhance our brand’s presentation within our major retail accounts with a shop-in-shop approach, using dedicated
floor space exclusively for our products, including flooring, lighting, walls, displays and images.

Sales and Distribution

The majority of our sales are generated through wholesale channels which include independent and
specialty retailers, institutional athletic departments, leagues and teams, national and regional sporting goods
chains and department store chains. In addition, we sell our products to independent distributors in various
countries where we generally do not have direct sales operations and through licensees. Our products are offered
in over twenty five thousand retail stores worldwide.

We also sell our products directly to consumers through our own network of specialty and factory house

stores in our North American Operating Segment, and through our website operations in the United States,
Canada and certain countries in Europe. These factory house stores serve an important role in our overall
inventory management by allowing us to sell a significant portion of excess, discontinued and out-of-season

products while maintaining the integrity of our brand. Through our specialty stores, consumers experience our
brand first-hand and have broader access to our performance products. In 2011, sales through our wholesale,
direct to consumer and licensing channels represented 70%, 27% and 3% of net revenues, respectively.

We operate in four geographic segments: (1) North America, (2) Europe, the Middle East and Africa
(“EMEA”), (3) Asia, and (4) Latin America. Each geographic segment operates predominantly in one industry:
the design, development, marketing and distribution of performance apparel, footwear and accessories. While our
international operating segments are currently not material and we combine them into other foreign countries for
reporting purposes, we believe that the trend toward performance products is global. We plan to continue to
introduce our products and simple merchandising story to athletes throughout the world. We are introducing our
performance apparel, footwear and accessories in a manner consistent with our past brand-building strategy,
including selling our products directly to teams and individual athletes in these markets, thereby providing us
with product exposure to broad audiences of potential consumers. The following table presents net sales to
unrelated entities and approximate percentages of net revenues by geographic distribution for each of the years
ending December 31, 2011, 2010 and 2009:

2011

% of

Year ended December 31,
2010

% of

2009

% of
Net Revenues

(In thousands)

Net Revenues

Net Revenues Net Revenues

North America
Other foreign countries

$1,383,346
89,338

93.9% $ 997,816
66,111
6.1%

93.8%
6.2%

$808,020
48,391

94.3%
5.7%

Total net revenues

$1,472,684

100.0% $1,063,927

100.0%

$856,411

100.0%

North America

North America accounted for 94% of our net sales for 2011. We sell our branded apparel, footwear and
accessories in North America to approximately eighteen thousand retail stores and through our own direct to
consumer channels. In 2011, our two largest customers were, in alphabetical order, Dick’s Sporting Goods and
The Sports Authority. These two customers accounted for a total of 26% of our total net revenues in 2011, and
one of these customers individually accounted for at least 10% of our net revenues in 2011.

Our direct to consumer sales are generated primarily through our specialty and factory house stores and
websites. As of December 31, 2011, we had 80 factory house stores, of which the majority is located at outlet
centers on the East Coast of the United States. As of December 31, 2011, we had 5 specialty stores located near
Annapolis, Maryland, Chicago, Illinois, Boston, Massachusetts, Washington, D.C. and Vail, Colorado.
Consumers can purchase our products directly from our e-commerce website, www.underarmour.com.

In addition, we earn licensing income in North America based on our licensees’ sale of socks, team
uniforms, baby and kids’ apparel, eyewear and custom-molded mouth guards, as well as the distribution of our
products to college bookstores and golf pro shops. In order to maintain consistent quality and performance, we
pre-approve all products manufactured and sold by our licensees, and our quality assurance team strives to ensure
that the products meet the same quality and compliance standards as the products that we sell directly.

We distribute the majority of our products sold to our North American wholesale customers and our own

retail stores from distribution centers of approximately 667.0 thousand square feet that we lease and operate
approximately 15 miles from our corporate headquarters in Baltimore, Maryland. In addition, we distribute our
products in North America through a third-party logistics provider with primary locations in California and in
Florida. In late 2011, we began leasing a new distribution facility in California of approximately 300.0 thousand
square feet which is also operated by this provider. The agreement with this provider continues until December
2013. In some instances, we arrange to have products shipped from the independent factories that manufacture
our products directly to customer-designated facilities.

Other Foreign Countries

Only 6% of our net revenues were generated outside of North America in 2011. We believe the future

success of our brand is dependent on developing our business outside of North America.

EMEA

We sell our apparel, footwear and accessories to approximately four thousand retail stores and through our

websites in certain European countries. We also sell our apparel, footwear and accessories to independent
distributors in various European countries where we do not have direct sales operations. In addition, we sell our
branded products to soccer, running and golf clubs in the United Kingdom, soccer teams in France, Germany,
Greece, Ireland, Italy, Spain and Sweden, as well as First Division Rugby clubs in France, Ireland, Italy and the
United Kingdom. Beginning in 2012, we will sell the Tottenham Hotspur Football Club replica product for the
Club’s supporters around the world.

We generally distribute our products to our retail customers and e-commerce consumers in EMEA through a

third-party logistics provider based out of Venlo, The Netherlands. This agreement continues until April 2013.

Asia

Since 2002 we have had a license agreement with Dome Corporation, which produces, markets and sells our

branded apparel, footwear and accessories in Japan. We are actively involved with this licensee to develop
variations of our products for the different sizes, sports interests and preferences of the Japanese consumer. Our
branded products are now sold in Japan to professional sports teams, including Omiya Ardija, a professional
soccer club in Saitama, Japan, as well as baseball and other soccer teams, and to over twenty five hundred
independent specialty stores and large sporting goods retailers. We made a cost-based minority investment in
Dome Corporation in January 2011.

We also sell our apparel, footwear and accessories to independent distributors in Australia and New Zealand

where we do not have direct sales operations.

During 2011, we opened our first specialty store in Shanghai, China to begin to learn about the Chinese
consumer. We generally distribute our products to our retail customers in Asia through a third-party logistics
provider based out of Hong Kong.

Latin America

We sell to Latin American consumers through independent distributors in Latin American countries where

we do not have direct sales operations. We generally distribute our products to these independent distributors
through our distribution facilities in the United States.

Seasonality

Historically, we have recognized a significant portion of our income from operations in the last two quarters

of the year, driven primarily by increased sales volume of our products during the fall selling season, reflecting
our historical strength in fall sports, and the seasonality of our higher priced COLDGEAR® line. The majority of
our net revenues were generated during the last two quarters in each of 2011, 2010 and 2009. The level of our
working capital generally reflects the seasonality and growth in our business. We generally expect inventory,
accounts payable and certain accrued expenses to be higher in the second and third quarters in preparation for the
fall selling season.

Product Design and Development

Our products are manufactured with technical fabrications produced by third parties and developed in

collaboration with our product development team. This approach enables us to select and create superior,
technically advanced fabrics, produced to our specifications, while focusing our product development efforts on
design, fit, climate and product end use.

We seek to regularly upgrade and improve our products with the latest in innovative technology while

broadening our product offerings. Our goal, to deliver superior performance in all our products, provides our
developers and licensees with a clear, overarching direction for the brand and helps them identify new
opportunities to create performance products that meet the changing needs of athletes. We design products with
“visible technology,” utilizing color, texture and fabrication to enhance our customers’ perception and
understanding of product use and benefits.

Our product development team works closely with our sports marketing and sales teams as well as
professional and collegiate athletes to identify product trends and determine market needs. For example, these
teams worked closely to identify the opportunity and market for our CHARGED COTTON® products, which are
made from natural cotton but perform like our synthetic products, drying faster and wicking away moisture from
the body, and our CHARGED COTTON® Storm Fleece products with a unique, water-resistant finish that repels
water, without stifling airflow.

Sourcing, Manufacturing and Quality Assurance

Many of the specialty fabrics and other raw materials used in our products are technically advanced
products developed by third parties and may be available, in the short term, from a limited number of sources.
The fabric and other raw materials used to manufacture our products are sourced by our manufacturers from a
limited number of suppliers pre-approved by us. In 2011, approximately 50% to 55% of the fabric used in our
products came from six suppliers. These fabric suppliers have locations in Malaysia, Mexico, Peru, Taiwan and
the United States. We continue to seek new suppliers and believe, although there can be no assurance, that this
concentration will decrease over time. The fabrics used by our suppliers and manufacturers are primarily
synthetic fabrics and involve raw materials, including petroleum based products, that may be subject to price
fluctuations and shortages. In 2011 we introduced CHARGED COTTON® products which primarily use cotton
fabrics that also may be subject to price fluctuations and shortages.

Substantially all of our products are manufactured by unaffiliated manufacturers and, in 2011, seven
manufacturers produced approximately 45% of our products. In 2011, our products were manufactured by 23
primary manufacturers, operating in 16 countries, with approximately 60% of our products manufactured in Asia,
22% in Central and South America, 8% in Mexico and 8% in the Middle East. All manufacturers are evaluated
for quality systems, social compliance and financial strength by our quality assurance team prior to being
selected and on an ongoing basis. Where appropriate, we strive to qualify multiple manufacturers for particular
product types and fabrications. We also seek out vendors that can perform multiple manufacturing stages, such as
procuring raw materials and providing finished products, which helps us to control our cost of goods sold. We
enter into a variety of agreements with our manufacturers, including non-disclosure and confidentiality
agreements, and we require that all of our manufacturers adhere to a code of conduct regarding quality of
manufacturing and working conditions and other social concerns. We do not, however, have any long term
agreements requiring us to utilize any manufacturer, and no manufacturer is required to produce our products in
the long term. We have a subsidiary in Hong Kong to support our manufacturing, quality assurance and sourcing
efforts for apparel and a subsidiary in Guangzhou, China to support our manufacturing, quality assurance and
sourcing efforts for footwear and accessories.

We also manufacture a limited number of apparel products on-premises in our quick turn, Special Make-Up
Shop located at one of our distribution facilities in Maryland. Through this 17,000 square-foot shop, we are able

to build and ship apparel products on tight deadlines for high-profile athletes, leagues and teams. While the
apparel products manufactured in the quick turn, Special Make-Up Shop represent an immaterial portion of our
total net revenues, we believe the facility helps us to provide superior service to select customers.

Inventory Management

Inventory management is important to the financial condition and operating results of our business. We
manage our inventory levels based on any existing orders, anticipated sales and the rapid-delivery requirements
of our customers. Our inventory strategy is focused on continuing to meet consumer demand while improving
our inventory efficiency over the long term by putting systems and processes in place to improve our inventory
management. These systems and processes are designed to improve our forecasting and supply planning
capabilities. In addition to systems and processes, key areas of focus that we believe will enhance inventory
performance are SKU rationalization, added discipline around the purchasing of product, production lead time
reduction, and better planning and execution in selling of excess inventory through our factory house stores and
other liquidation channels. With regards to SKU rationalization, we anticipate a reduction of our total number of
SKUs by approximately 20% from 2011 to 2012.

Our practice, and the general practice in the apparel, footwear and accessory industries, is to offer retail

customers the right to return defective or improperly shipped merchandise. As it relates to new product
introductions, which can often require large initial launch shipments, we commence production before receiving
orders for those products from time to time. This can affect our inventory levels as we build pre-launch
quantities.

Intellectual Property

We believe we own the internally developed material trademarks used in connection with the marketing,

distribution and sale of all our products, both domestically and internationally, where our products are currently
sold or manufactured. Our major trademarks include the UA Logo and UNDER ARMOUR®, both of which are
registered in the United States, Canada, Mexico, the European Union, Japan, China and several other foreign
countries in which we sell or plan to sell our products. We also own trademark registrations for UA®,
ARMOUR®, HEATGEAR®, COLDGEAR®, ALLSEASONGEAR®, PROTECT THIS HOUSE®, THE
ADVANTAGE IS UNDENIABLE ®, DUPLICITY®, MPZ®, BOXERJOCK®, RECHARGE®, COMBINE®,
CHARGED COTTON®, MICRO G® and several other trademarks, including numerous trademarks that
incorporate the term ARMOUR such as ARMOURBITE®, ARMOURLOFT®, ARMOURSTORM®, ARMOUR
FLEECE®, BABY ARMOUR®, and several others. In addition, we have applied to register numerous other
trademarks including: ARE YOU FROM HERE?™, E39™ and 4D FOAM™. We also own domain names for
our primary trademarks (most notably underarmour.com and ua.com) and hold copyright registrations for several
commercials, as well as for certain artwork. We intend to continue to strategically register, both domestically and
internationally, trademarks and copyrights we utilize today and those we develop in the future. We will continue
to aggressively police our trademarks and pursue those who infringe, both domestically and internationally.

We believe the distinctive trademarks we use in connection with our products are important in building our

brand image and distinguishing our products from those of others. These trademarks are among our most
valuable assets. In addition to our distinctive trademarks, we also place significant value on our trade dress,
which is the overall image and appearance of our products, and we believe our trade dress helps to distinguish
our products in the marketplace.

The intellectual property rights in much of the technology, materials and processes used to manufacture our
products are often owned or controlled by our suppliers. However, we seek to protect certain innovative products
and features that we believe to be new, strategic and important to our business. In 2011, we filed several patent
applications in connection with certain of our products and designs that we believe offer a unique utility or
function. We will continue to file patent applications where we deem appropriate to protect our inventions and
designs, and we expect the number of applications to grow as our business grows and as we continue to innovate.

Competition

The market for performance apparel, footwear and accessories is highly competitive and includes many new

competitors as well as increased competition from established companies expanding their production and
marketing of performance products. The fabrics and technology used in manufacturing our products are generally
not unique to us, and we do not currently own any fabric or process patents. Many of our competitors are large
apparel, footwear and sporting goods companies with strong worldwide brand recognition and significantly
greater resources than us, such as Nike and adidas. We also compete with other manufacturers, including those
specializing in outdoor apparel, and private label offerings of certain retailers, including some of our customers.

In addition, we must compete with others for purchasing decisions, as well as limited floor space at retailers.
We believe we have been successful in this area because of the relationships we have developed and as a result of
the strong sales of our products. However, if retailers earn higher margins from our competitors’ products, they
may favor the display and sale of those products.

We believe we have been able to compete successfully because of our brand image and recognition, the
performance and quality of our products and our selective distribution policies. We also believe our focused
gearline merchandising story differentiates us from our competition. In the future we expect to compete for
consumer preferences and expect that we may face greater competition on pricing. This may favor larger
competitors with lower production costs per unit that can spread the effect of price discounts across a larger array
of products and across a larger customer base than ours. The purchasing decisions of consumers for our products
often reflect highly subjective preferences that can be influenced by many factors, including advertising, media,
product sponsorships, product improvements and changing styles.

Employees

As of December 31, 2011, we had approximately fifty four hundred employees, including approximately

twenty nine hundred in our factory house and specialty stores and eight hundred at our distribution facilities.
Approximately eighteen hundred of our employees were full-time. Most of our employees are located in the
United States and none of our employees are currently covered by a collective bargaining agreement. We have
had no labor-related work stoppages, and we believe our relations with our employees are good.

Available Information

We will make available free of charge on or through our website at www.underarmour.com our annual

reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to these
reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act as soon as reasonably
practicable after we file these materials with the Securities and Exchange Commission. We also post on this
website our key corporate governance documents, including our board committee charters, our corporate
governance guidelines and our ethics policy.

ITEM 1A. RISK FACTORS

Forward-Looking Statements

Some of the statements contained in this Form 10-K and the documents incorporated herein by reference
constitute forward-looking statements. Forward-looking statements relate to expectations, beliefs, projections,
future plans and strategies, anticipated events or trends and similar expressions concerning matters that are not
historical facts, such as statements regarding our future financial condition or results of operations, our prospects
and strategies for future growth, the development and introduction of new products, and the implementation of
our marketing and branding strategies. In many cases, you can identify forward-looking statements by terms such
as “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “outlook,”
“potential” or the negative of these terms or other comparable terminology.

The forward-looking statements contained in this Form 10-K and the documents incorporated herein by
reference reflect our current views about future events and are subject to risks, uncertainties, assumptions and
changes in circumstances that may cause events or our actual activities or results to differ significantly from
those expressed in any forward-looking statement. Although we believe that the expectations reflected in the
forward-looking statements are reasonable, we cannot guarantee future events, results, actions, levels of activity,
performance or achievements. Readers are cautioned not to place undue reliance on these forward-looking
statements. A number of important factors could cause actual results to differ materially from those indicated by
these forward-looking statements, including, but not limited to, those factors described in “Risk Factors” and
“Management’s Discussion and Analysis of Financial Condition and Results of Operations.” These factors
include without limitation:

•

changes in general economic or market conditions that could affect consumer spending and the
financial health of our retail customers;

our ability to effectively manage our growth and a more complex, global business;

our ability to effectively develop and launch new, innovative and updated products;

our ability to accurately forecast consumer demand for our products and manage our inventory in
response to changing demands;

increased competition causing us to reduce the prices of our products or to increase significantly our
marketing efforts in order to avoid losing market share;

fluctuations in the costs of our products;

loss of key suppliers or manufacturers or failure of our suppliers or manufacturers to produce or deliver
our products in a timely or cost-effective manner;

our ability to further expand our business globally and to drive brand awareness and consumer
acceptance of our products in other countries;

our ability to accurately anticipate and respond to seasonal or quarterly fluctuations in our operating
results;

our ability to effectively market and maintain a positive brand image;

the availability, integration and effective operation of management information systems and other
technology; and

our ability to attract and maintain the services of our senior management and key employees.

The forward-looking statements contained in this Form 10-K reflect our views and assumptions only as of

the date of this Form 10-K. We undertake no obligation to update any forward-looking statement to reflect events
or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated
events.

Our results of operations and financial condition could be adversely affected by numerous risks. You
should carefully consider the risk factors detailed below in conjunction with the other information contained
in this Form 10-K. Should any of these risks actually materialize, our business, financial condition and future
prospects could be negatively impacted.

During a downturn in the economy, consumer purchases of discretionary items are affected, which could
materially harm our sales, profitability and financial condition.

Many of our products may be considered discretionary items for consumers. Factors affecting the level of

consumer spending for such discretionary items include general economic conditions, the availability of
consumer credit and consumer confidence in future economic conditions. Consumer purchases of discretionary
items tend to decline during recessionary periods when disposable income is lower or during other periods of
economic instability or uncertainty. We have limited experience operating a business during a recessionary
period or during periods of slow economic growth and high unemployment and can therefore not predict the full
impact of a downturn in the economy on our sales and profitability, including how our business responds when
the economy is recovering from a recession or periods of slow growth. A downturn in the economy in markets in
which we sell our products may materially harm our sales, profitability and financial condition.

If the financial condition of our retail customers declines, our financial condition and results of operations
could be adversely impacted.

We extend credit to our customers based on an assessment of a customer’s financial condition, generally

without requiring collateral. We face increased risk of order reduction or cancellation when dealing with
financially ailing customers or customers struggling with economic uncertainty. A slowing economy in our key
markets or a continued decline in consumer purchases of sporting goods generally could have an adverse effect
on the financial health of our retail customers, which could in turn have an adverse effect on our sales, our ability
to collect on receivables and our financial condition.

A decline in sales to, or the loss of, one or more of our key customers could result in a material loss of net
revenues and negatively impact our prospects for growth.

In 2011, approximately 26% of our net revenues were generated from sales to our two largest customers in

alphabetical order, Dick’s Sporting Goods and The Sports Authority. We currently do not enter into long term
sales contracts with these or our other key customers, relying instead on our relationships with these customers
and on our position in the marketplace. As a result, we face the risk that one or more of these key customers may
not increase their business with us as we expect, or may significantly decrease their business with us or terminate
their relationship with us. The failure to increase our sales to these customers as much as we anticipate would
have a negative impact on our growth prospects and any decrease or loss of these key customers’ business could
result in a material decrease in our net revenues and net income.

If we continue to grow at a rapid pace, we may not be able to effectively manage our growth and the
increased complexity of a global business and as a result our brand image, net revenues and profitability
may decline.

We have expanded our operations rapidly since our inception and our net revenues have increased to

$1,472.7 million in 2011 from $606.6 million in 2007. If our operations continue to grow at a rapid pace, we may
experience difficulties in obtaining sufficient raw materials and manufacturing capacity to produce our products,
as well as delays in production and shipments, as our products are subject to risks associated with overseas
sourcing and manufacturing. We could be required to continue to expand our sales and marketing, product
development and distribution functions, to upgrade our management information systems and other processes
and technology, and to obtain more space to support our expanding workforce. This expansion could increase the
strain on these and other resources, and we could experience serious operating difficulties, including difficulties
in hiring, training and managing an increasing number of employees. In addition, as our business becomes more

complex through the introduction of more new products, such as new footwear, and the expansion of our
distribution channels, including additional specialty and factory house stores and expanded distribution in malls
and department stores, and expanded international distribution, these operational strains and other difficulties
could increase. These difficulties could result in the erosion of our brand image and a decrease in net revenues
and net income.

If we are unable to anticipate consumer preferences and successfully develop and introduce new,
innovative and updated products, we may not be able to maintain or increase our net revenues and
profitability.

Our success depends on our ability to identify and originate product trends as well as to anticipate and react

to changing consumer demands in a timely manner. All of our products are subject to changing consumer
preferences that cannot be predicted with certainty. Our new products may not receive consumer acceptance as
consumer preferences could shift rapidly to different types of performance or other sports products or away from
these types of products altogether, and our future success depends in part on our ability to anticipate and respond
to these changes. Failure to anticipate and respond in a timely manner to changing consumer preferences could
lead to, among other things, lower sales and excess inventory levels.

Even if we are successful in anticipating consumer preferences, our ability to adequately react to and
address those preferences will in part depend upon our continued ability to develop and introduce innovative,
high-quality products. In addition, if we fail to introduce technical innovation in our products, consumer demand
for our products could decline, and if we experience problems with the quality of our products, we may incur
substantial expense to remedy the problems. The failure to effectively introduce new products and enter into new
product categories that are accepted by consumers could result in a decrease in net revenues and excess inventory
levels, which could have a material adverse effect on our financial condition.

Our results of operations could be materially harmed if we are unable to accurately forecast demand for
our products.

To ensure adequate inventory supply, we must forecast inventory needs and place orders with our
manufacturers before firm orders are placed by our customers. In addition, a significant portion of our net
revenues are generated by at-once orders for immediate delivery to customers, particularly during our historical
peak season from August through November. If we fail to accurately forecast customer demand we may
experience excess inventory levels or a shortage of product to deliver to our customers.

Factors that could affect our ability to accurately forecast demand for our products include:

•

an increase or decrease in consumer demand for our products;

our failure to accurately forecast consumer acceptance for our new products;

product introductions by competitors;

unanticipated changes in general market conditions or other factors, which may result in cancellations
of advance orders or a reduction or increase in the rate of reorders placed by retailers;

the impact on consumer demand due to unseasonable weather conditions;

• weakening of economic conditions or consumer confidence in future economic conditions, which could

reduce demand for discretionary items, such as our products; and

•

terrorism or acts of war, or the threat thereof, or political instability or unrest which could adversely
affect consumer confidence and spending or interrupt production and distribution of product and raw
materials.

Inventory levels in excess of customer demand may result in inventory write-downs or write-offs and the
sale of excess inventory at discounted prices, which would have an adverse effect on gross margin. In addition, if
we underestimate the demand for our products, our manufacturers may not be able to produce products to meet
our customer requirements, and this could result in delays in the shipment of our products and our ability to
recognize revenue, as well as damage to our reputation and customer relationships.

The difficulty in forecasting demand also makes it difficult to estimate our future results of operations and

financial condition from period to period. A failure to accurately predict the level of demand for our products
could adversely impact our profitability.

We operate in a highly competitive market and the size and resources of some of our competitors may
allow them to compete more effectively than we can, resulting in a loss of our market share and a decrease
in our net revenues and gross profit.

The market for performance apparel, footwear and accessories is highly competitive and includes many new

competitors as well as increased competition from established companies expanding their production and
marketing of performance products. Because we currently do not own any fabric or process patents, our current
and future competitors are able to manufacture and sell products with performance characteristics and
fabrications similar to our products. Many of our competitors are large apparel and footwear companies with
strong worldwide brand recognition. Because of the fragmented nature of the industry, we also compete with
other manufacturers, including those specializing in outdoor apparel and private label offerings of certain
retailers, including some of our retail customers. Many of our competitors have significant competitive
advantages, including greater financial, distribution, marketing and other resources, longer operating histories,
better brand recognition among consumers, more experience in global markets and greater economies of scale. In
addition, our competitors have long term relationships with our key retail customers that are potentially more
important to those customers because of the significantly larger volume and product mix that our competitors sell
to them. As a result, these competitors may be better equipped than we are to influence consumer preferences or
otherwise increase their market share by:

•

quickly adapting to changes in customer requirements;

readily taking advantage of acquisition and other opportunities;

discounting excess inventory that has been written down or written off;

devoting resources to the marketing and sale of their products, including significant advertising, media
placement and product endorsement;

adopting aggressive pricing policies; and

engaging in lengthy and costly intellectual property and other disputes.

In addition, while one of our growth strategies is to increase floor space for our products in retail stores and
generally expand our distribution to other retailers, retailers have limited resources and floor space, and we must
compete with others to develop relationships with them. Increased competition by existing and future
competitors could result in reductions in floor space in retail locations, reductions in sales or reductions in the
prices of our products, and if retailers earn greater margins from our competitors’ products, they may favor the
display and sale of those products. Our inability to compete successfully against our competitors and maintain
our gross margin could have a material adverse effect on our business, financial condition and results of
operations.

Our profitability may decline as a result of increasing pressure on margins.

Our industry is subject to significant pricing pressure caused by many factors, including intense
competition, consolidation in the retail industry, pressure from retailers to reduce the costs of products and
changes in consumer demand. These factors may cause us to reduce our prices to retailers and consumers, which

could cause our profitability to decline if we are unable to offset price reductions with comparable reductions in
our operating costs. This could have a material adverse effect on our results of operations and financial condition.

Fluctuations in the cost of products could negatively affect our operating results.

The fabrics used by our suppliers and manufacturers are made of raw materials including petroleum-based

products and cotton. Significant price fluctuations or shortages in petroleum or other raw materials can materially
adversely affect our cost of goods sold, results of operations and financial condition.

We rely on third-party suppliers and manufacturers to provide fabrics for and to produce our products,
and we have limited control over these suppliers and manufacturers and may not be able to obtain quality
products on a timely basis or in sufficient quantity.

Many of the specialty fabrics used in our products are technically advanced textile products developed by
third parties and may be available, in the short-term, from a very limited number of sources. Substantially all of
our products are manufactured by unaffiliated manufacturers, and, in 2011, seven manufacturers produced
approximately 45% of our products. We have no long term contracts with our suppliers or manufacturing
sources, and we compete with other companies for fabrics, raw materials, production and import quota capacity.

We may experience a significant disruption in the supply of fabrics or raw materials from current sources or,

in the event of a disruption, we may be unable to locate alternative materials suppliers of comparable quality at
an acceptable price, or at all. In addition, our unaffiliated manufacturers may not be able to fill our orders in a
timely manner. If we experience significant increased demand, or we lose or need to replace an existing
manufacturer or supplier as a result of adverse economic conditions or other reasons, additional supplies of
fabrics or raw materials or additional manufacturing capacity may not be available when required on terms that
are acceptable to us, or at all, or suppliers or manufacturers may not be able to allocate sufficient capacity to us in
order to meet our requirements. In addition, even if we are able to expand existing or find new manufacturing or
fabric sources, we may encounter delays in production and added costs as a result of the time it takes to train our
suppliers and manufacturers on our methods, products and quality control standards. Any delays, interruption or
increased costs in the supply of fabric or manufacture of our products could have an adverse effect on our ability
to meet retail customer and consumer demand for our products and result in lower net revenues and net income
both in the short and long term.

We have occasionally received, and may in the future continue to receive, shipments of product that fail to

conform to our quality control standards. In that event, unless we are able to obtain replacement products in a
timely manner, we risk the loss of net revenues resulting from the inability to sell those products and related
increased administrative and shipping costs. In addition, because we do not control our manufacturers, products
that fail to meet our standards or other unauthorized products could end up in the marketplace without our
knowledge, which could harm our brand and our reputation in the marketplace.

Labor disruptions at ports or our suppliers or manufacturers may adversely affect our business.

Our business depends on our ability to source and distribute products in a timely manner. As a result, we

rely on the free flow of goods through open and operational ports worldwide and on a consistent basis from our
suppliers and manufacturers. Labor disputes at various ports or at our suppliers or manufacturers create
significant risks for our business, particularly if these disputes result in work slowdowns, lockouts, strikes or
other disruptions during our peak importing or manufacturing seasons, and could have an adverse effect on our
business, potentially resulting in cancelled orders by customers, unanticipated inventory accumulation or
shortages and reduced net revenues and net income.

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

Our future growth depends in part on our expansion efforts outside of the North America. During the year
ended December 31, 2011, 94% of our net revenues were earned in North America. We have limited experience

with regulatory environments and market practices outside of North America, and may face difficulties in
expanding to and successfully operating in markets outside of North America. 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 limited brand recognition leading to delayed acceptance of our products. Failure to
develop new markets outside of North America will limit our opportunities for growth.

The operations of many of our manufacturers are subject to additional risks that are beyond our control
and that could harm our business.

In 2011, our products were manufactured by 23 primary manufacturers, operating in 16 countries. Of these,
seven manufactured approximately 45% of our products, at locations in Cambodia, China, Honduras, Indonesia,
Jordan, Mexico, Nicaragua, the Philippines, Vietnam and San Salvador. During 2011, approximately 60% of our
products were manufactured in Asia, 22% in Central and South America, 8% in Mexico and 8% in the Middle
East. As a result of our international manufacturing, we are subject to risks associated with doing business
abroad, including:

•

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;

the imposition of new laws and regulations, including those relating to labor conditions, quality and
safety standards, imports, duties, taxes and other charges on imports, trade restrictions and restrictions
on the transfer of funds, as well as rules and regulations regarding climate change;

reduced protection for intellectual property rights in some countries;

disruptions or delays in shipments; and

changes in local economic conditions in countries where our manufacturers and suppliers are located.

Sales of performance products may not continue to grow and this could adversely impact our ability to
grow our business.

We believe continued growth in industry-wide sales of performance apparel, footwear and accessories will

be largely dependent on consumers continuing to transition from traditional alternatives to performance products.
If consumers are not convinced these products are a better choice than traditional alternatives, growth in the
industry and our business could be adversely affected. In addition, because performance products are often more
expensive than traditional alternatives, consumers who are convinced these products provide a better alternative
may still not be convinced they are worth the extra cost. If industry-wide sales of performance products do not
grow, our ability to continue to grow our business and our financial condition and results of operations could be
materially adversely impacted.

Our revolving credit facility provides our lenders with a first-priority lien against substantially all of our
assets and contains financial covenants and other restrictions on our actions, and it could therefore 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 a revolving

credit facility. Our revolving credit facility provides for a committed revolving credit line of up to
$300.0 million. The agreement for our revolving credit facility contains a number of restrictions that limit our
ability, among other things, to:

•

use our accounts receivable, inventory, trademarks and most of our other assets as security in other
borrowings or transactions;

•

incur additional indebtedness;

sell certain assets;

• make certain investments;

•

guarantee certain obligations of third parties;

undergo a merger or consolidation; and

• materially change our line of business.

Our revolving credit facility also provides the lenders with the ability to reduce the borrowing base, even if

we are in compliance with all conditions of the revolving credit facility, upon a material adverse change to our
business, properties, assets, financial condition or results of operations. In addition, we must maintain a certain
leverage ratio and interest coverage ratio as defined in the credit agreement. 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 credit agreement could
result in a default. In addition, the credit agreement includes a cross default provision whereby an event of
default under certain other debt obligations will be considered an event of default under the credit agreement. A
default under the credit agreement could cause the lenders to accelerate the timing of payments and exercise their
lien on essentially all of our assets, which would have a material adverse effect on our business, operations,
financial condition and liquidity. In addition, because borrowings under the revolving credit facility bear interest
at variable interest rates, which we do not anticipate hedging against, increases in interest rates would increase
our cost of borrowing, resulting in a decline in our net income and cash flow. There were no amounts outstanding
under our revolving credit facility as of December 31, 2011.

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

Growing and operating our business will require significant cash outlays and capital expenditures and

commitments. If cash on hand and cash generated from operations 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. We may not be able to raise needed cash on terms acceptable to us or at all. 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.

Our operating results are subject to seasonal and quarterly variations in our net revenues and net income,
which could adversely affect the price of our Class A Common Stock.

We have experienced, and expect to continue to experience, seasonal and quarterly variations in our net
revenues and net income. These variations are primarily related to increased sales of our products during the fall
season, reflecting our historical strength in fall sports, and the seasonality of sales of our higher priced
COLDGEAR® line. The majority of our net revenues were generated during the last two quarters in each of
2011, 2010 and 2009, respectively.

Our quarterly results of operations may also fluctuate significantly as a result of a variety of other factors,
including, among other things, the timing and introduction of advertising for new products 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 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
Class A Common Stock to fluctuate significantly.

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

We require our suppliers, independent manufacturers and licensees of our products to operate their
businesses in compliance with the laws and regulations that apply to them as well as the social and other
standards and policies we impose on them. We do not control these suppliers, manufacturers or licensees or their
labor practices. A violation of our policies, labor laws or other laws by our suppliers, manufacturers or licensees
could interrupt or otherwise disrupt our sourcing or damage our brand image. Negative publicity regarding the
production methods of any of our suppliers, manufacturers or licensees could adversely affect our reputation and
sales and force us to locate alternative suppliers, manufacturing sources or licensees.

In addition, we have sponsorship contracts with a variety of athletes and feature those athletes in our
advertising and marketing efforts, 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 the reputations of those athletes, teams or leagues. As a result, our brand image, net
revenues and profitability could be adversely affected.

Sponsorships and designations as an official supplier may become more expensive and this could impact
the value of our brand image.

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 footwear to a variety of sports teams and leagues at the collegiate 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.

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, the proper operation of software and
hardware, power interruptions or other system failures. In addition, because the majority of our products are
distributed from two nearby locations in Maryland, our operations could also be interrupted by floods, fires or
other natural disasters near our distribution facilities, as well as labor difficulties. 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, including the shipping of product to and from our distribution facilities. If we encounter problems with
our distribution facilities, 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, interruption or security lapse
of that technology could harm our ability to effectively operate our business.

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. 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, and it could require significant capital investments to remediate any
such failure, problem or breach.

Hackers and data thieves are increasingly sophisticated and operate large scale and complex automated

attacks. Any breach of our network may result in the loss of valuable business data, our customers’ or
employees’ personal information or a disruption of our business, which could give rise to unwanted media
attention, damage our customer relationships and reputation and result in lost sales, fines or lawsuits. In addition,
we must comply with increasingly complex regulatory standards enacted to protect this business and personal
data. An inability to maintain compliance with these regulatory standards could subject us to legal risks.

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 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, the outcome of income tax audits in various jurisdictions around the world, and
any repatriation of non-US earnings for which we have not previously provided for U.S. taxes. We regularly
assess all of these matters to determine the adequacy of our tax provision, which is subject to significant
discretion.

Our financial results may be adversely affected if substantial investments in businesses and operations fail
to produce expected returns.

From time to time, we may invest in business infrastructure, new businesses, and expansion of existing
businesses, such as recent investments in our direct to consumer sales channel or our recent minority investment
in our Japanese licensee. These investments require substantial cash investments and management attention. We
believe cost effective investments are essential to business growth and profitability. However, significant
investments are subject to typical risks and uncertainties inherent in acquiring or expanding a business. The
failure of any significant investment to provide the returns or profitability we expect could have a material
adverse effect on our financial results and divert management attention from more profitable business operations.

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, President and Chief Executive Officer. 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, 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, we may not be
able to achieve our business objectives.

Our growth has largely been the result of significant contributions by our current senior management,
product design teams and other key employees. However, to be successful in continuing to grow our business, 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 growth of our business, 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.

Our failure to comply with trade and other regulations could lead to investigations or actions by
government regulators and negative publicity.

The labeling, distribution, importation, marketing and sale of our products are subject to extensive
regulation by various federal agencies, including the Federal Trade Commission, Consumer Product Safety
Commission and state attorneys general in the U.S., 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 regulations, we could become subject to significant penalties or claims, which could harm our
results of operations or our ability to conduct our business. In addition, the adoption of new regulations or
changes in the interpretation of existing regulations may result in significant compliance costs or discontinuation
of product sales and may impair the marketing of our products, resulting in significant loss of net revenues.

Our President and Chief Executive Officer controls the majority of the voting power of our common stock.

Our Class A Common Stock has one vote per share and our Class B Convertible Common Stock has 10

votes per share. Our President and Chief Executive Officer, Kevin A. Plank, beneficially owns all outstanding
shares of Class B Convertible 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. This concentration of ownership may have various effects including, but not limited to, delaying or
preventing a change of control.

Our fabrics and manufacturing technology are not patented and can be imitated by our competitors.

The intellectual property rights in the technology, fabrics and processes used to manufacture 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 and we currently own no 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 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 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.

Our trademark and other proprietary rights could potentially conflict with the rights of others and we
may be prevented from selling 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. There may be obstacles that arise as we
expand our product line and geographic scope of our marketing. From time to time, we have received claims
relating to intellectual property rights of others, and we expect third parties will continue to assert intellectual
property claims against us, particularly as we expand our business and the number of products we offer. Any

claim, regardless of its merit, could be expensive and time consuming to defend. Successful infringement claims
against us could result in significant monetary liability or prevent us from selling some of our products. In
addition, resolution of claims may require us to 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.

ITEM 1B. UNRESOLVED STAFF COMMENTS

Not applicable.

ITEM 2. PROPERTIES

Our principal executive and administrative offices are located at an office complex in Baltimore, Maryland.

We own part of this office complex and lease part of this complex. We believe that our current location will be
sufficient for the operation of our business over the next twelve months. Our primary distribution facilities are in
Glen Burnie, Maryland and Rialto, California. We believe our distribution facilities and space available through
our third-party logistics providers will be adequate to meet our short term needs. We may expand to additional
distribution facilities in the future.

The location, general use, approximate size and lease term, if applicable, of our properties as of

December 31, 2011 are set forth below:

Location

Use

Baltimore, MD . . . . . Corporate headquarters
Amsterdam, The

Netherlands . . . . . . European headquarters

Glen Burnie, MD . . . Distribution facilities, 17,000 square foot quick-turn,

Special Make-Up Shop manufacturing facility and 6,000
square foot factory house store

Rialto, CA . . . . . . . . . Distribution facility
Denver, CO . . . . . . . . Sales office
Ontario, Canada . . . . Sales office
Guangzhou, China . . . Quality assurance & sourcing for footwear
Hong Kong . . . . . . . . Quality assurance & sourcing for apparel
Various . . . . . . . . . . . Retail store space

Approximate
Square Feet

Lease
End Date

538,200

(1)

11,900 December 2015

(2)
(3)
August 2013

667,000
300,000
6,000
17,000 December 2016
4,600 December 2012
September 2014
(4)

20,900
429,000

(1)

(2)

(3)

(4)

Includes 400.0 thousand square feet of office space that we purchased during 2011 and 138.2 thousand
square feet that we are leasing with an option to renew in November 2014. Of the 400.0 thousand square
feet of office space we own, 163.6 thousand square feet is leased to third party tenants with remaining lease
terms ranging from 3 months to 14.5 years. We intend to occupy additional space as it becomes available.

Includes a 359.0 thousand square foot facility with an option to renew in September 2021 and a
308.0 thousand square foot facility with an option to renew in May 2013.

Includes a lease for 300.0 thousand square feet within a 1.2 million square foot facility with a lease term
through December 2012, expanding to 703.2 thousand square feet in January 2013 and to 1.2 million square
feet in January 2014 or sooner in January 2013 if the space becomes available.

Includes eighty four factory house and specialty stores located in the United States with lease end dates of
April 2012 through October 2021. We also have an additional factory house store which is included in the
Glen Burnie, Maryland location in the table above. Excluded in the table above are executed lease
agreements for factory house stores that we did not yet occupy as of December 31, 2011. 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 various legal proceedings. We believe all such litigation is

routine in nature and incidental to the conduct of our business, and we believe no such litigation will have a
material adverse effect on our financial condition, cash flows or results of operations.

EXECUTIVE OFFICERS OF THE REGISTRANT

Our executive officers are:

Name

Age

Position

Kevin A. Plank . . . . . . . . . . . . .

President, Chief Executive Officer and Chairman of the Board of Directors

Byron K. Adams, Jr. . . . . . . . . .

57 Chief Performance Officer, Member of the Board of Directors

Brad Dickerson . . . . . . . . . . . . .

47 Chief Financial Officer

Kip J. Fulks . . . . . . . . . . . . . . . .

39 Chief Operating Officer

Eugene R. McCarthy . . . . . . . . .

Adam Peake . . . . . . . . . . . . . . .

Senior Vice President of Footwear

Senior Vice President of U.S. Sales

J. Scott Plank . . . . . . . . . . . . . . .

46 Executive Vice President of Business Development

John S. Rogers . . . . . . . . . . . . .

49 Vice President, General Manager of E-Commerce

Daniel J. Sawall

. . . . . . . . . . . .

57 Vice President of Retail

Henry B. Stafford . . . . . . . . . . .

Senior Vice President of Apparel

Kevin A. Plank has served as our Chief Executive Officer and Chairman of the Board of Directors since
1996, and as our President from 1996 to July 2008 and since August 2010. 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. Mr. Plank’s brother is J. Scott Plank, our
Executive Vice President of Business Development.

Byron K. Adams, Jr. has been a member of our Board of Directors since September 2003 and our Chief
Performance Officer since October 2011 with primary responsibility for the development of company-wide
business strategy, human resources and organizational alignment and processes. Prior to joining our Company,
Mr. Adams founded and was a managing director of Rosewood Capital, LLC from 1985 to September 2011.
Rosewood Capital was a private equity firm focused on consumer brands that, through its affiliates, was the
institutional investor in our Company prior to our initial public offering. At Rosewood Capital, Mr. Adams was
primarily responsible for assisting management teams in the development of their business strategies and
organizations.

Brad Dickerson has been our Chief Financial Officer since March 2008. Prior to that, he served as Vice
President of Accounting and Finance from February 2006 to February 2008 and Corporate Controller from July
2004 to January 2006. Prior to joining our Company, Mr. Dickerson served as Chief Financial Officer of
Macquarie Aviation North America from January 2003 to July 2004 and in various capacities for Network
Building & Consulting from 1994 to 2003, including Chief Financial Officer from 1998 to 2003.

Kip J. Fulks has been our Chief Operating officer since September 2011. Prior to that, he served as
Executive Vice President of Product from January 2011 to August 2011, Senior Vice President of Outdoor and
Innovation from March 2008 to December 2010, as Senior Vice President of Outdoor from October 2007 to
February 2008, as Senior Vice President of Sourcing, Quality Assurance and Product Development from March
2006 to September 2007, and Vice President of Sourcing and Quality Assurance from 1997 to February 2006.

Eugene R. McCarthy has been our Senior Vice President of Footwear since August 2009. Prior to joining

our Company, he served as Co-President of The Timberland brand from December 2007 to July 2009, President
of its Authentic Youth Division from February 2007 to November 2007 and Group Vice President of Product and
Design from April 2006 to January 2007. Prior thereto, Mr. McCarthy served as Senior Vice President of Product

and Design for Reebok International from July 2003 to November 2005 and in a variety of capacities for Nike
from 1982 to 2003, including Global Director of Sales and Retail Marketing for Brand Jordan, from 1999 to
2003.

Adam Peake has been our Senior Vice President of U.S. Sales since September 2011. Prior to that, he served

as Vice President of North American Sales from January 2010 to August 2011, as interim Vice President of
Footwear from May 2009 to December 2009 and as Vice President of Sales for Key and Independent Accounts
from January 2008 to April 2009, and from 2002 to 2007 he held various senior management positions in Sales.

J. Scott Plank has been our Executive Vice President of Business Development since August 2009 focusing

on domestic and international business development opportunities. Prior to that, he served as Senior Vice
President of Retail from March 2006 to July 2009 with responsibility for factory house and specialty stores and
e-commerce, as Chief Administrative Officer from January 2004 to February 2006 and Vice President of Finance
from 2000 to 2003 with operational and strategic responsibilities. Mr. Plank was a director of Under Armour, Inc.
from 2001 until July 2005. Mr. Plank is the brother of Kevin A. Plank, our President, Chief Executive Officer
and Chairman of the Board of Directors.

John S. Rogers has been Vice President, General Manager of Global E-commerce since May 2010. Prior to
joining our Company, he served in a variety of capacities for The Orvis Company, Inc., including Vice President
of Multi-Channel Marketing and General Manager of the UK Division from 2006 to April 2010, Director of
Multi-Channel Marketing from 2004 to 2006 and Director of E-commerce Marketing from 2000 to 2004. Prior
thereto, Mr. Rogers served as Director of Branding for Toysmart.com, a Walt Disney company, from 1999 to
2000 and Director of Global Brands for Hasbro, from 1994 to 1999.

Daniel J. Sawall has been Vice President of Retail since February 2010. Prior to joining our Company, he
served as Senior Vice President and General Merchandise Manager of Golfsmith from August 2009 to January
2010. Prior thereto, Mr. Sawall served as General Manager for US Nike Factory Stores from February 2007 to
April 2009, an independent marketing and business consultant from January 2003 to January 2007, Vice
President and General Merchandise Manager for the d.e.m.o. division of Pacific Sunwear from July 2000 to May
2002 and General Merchandise Manager, Retail Stores for Guess? from 1998 to 2000. He began his career as a
buyer for Federated Department Stores and then worked as a buyer and in various management capacities for 15
years for Dillard’s Department Stores.

Henry B. Stafford has been Senior Vice President of Apparel since June 2010. Prior to joining our company,
he worked with American Eagle Outfitters as Senior Vice President and Chief Merchandising Officer of The AE
Brand from April 2007 to May 2010, General Merchandise Manager and Senior Vice President of Men’s and AE
Canadian Division from April 2005 to March 2007 and General Merchandise Manager and Vice President of
Men’s from September 2003 to March 2005. Prior thereto, Mr. Stafford served in a variety of capacities for Old
Navy from 1998 to 2003, including Divisional Merchandising Manager for Men’s Tops from 2001 to 2003, and
served as a buyer for Abercrombie and Fitch from 1996 to 1998.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

PART II

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER

MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Under Armour’s Class A Common Stock is traded on the New York Stock Exchange (“NYSE”) under the

symbol “UA”. As of January 31, 2012, there were 1,137 record holders of our Class A Common Stock and 5
record holders of Class B Convertible Common Stock which are beneficially owned by our President and Chief
Executive Officer Kevin A. Plank. The following table sets forth by quarter the high and low sale prices of our
Class A Common Stock on the NYSE during 2011 and 2010.

2011

First Quarter (January 1 – March 31)
Second Quarter (April 1 – June 30)
Third Quarter (July 1 – September 30)
Fourth Quarter (October 1 – December 31)

2010

First Quarter (January 1 – March 31)
Second Quarter (April 1 – June 30)
Third Quarter (July 1 – September 30)
Fourth Quarter (October 1 – December 31)

Dividends

High

Low

$70.69
$80.00
$82.95
$87.40

$51.77
$61.56
$52.62
$62.50

$31.16
$38.87
$46.10
$60.14

$23.72
$29.12
$31.63
$44.07

No cash dividends were declared or paid during 2011 or 2010 on any class of our common stock. We
currently anticipate we will retain any future earnings for use in our business. As a result, we do not anticipate
paying any cash dividends in the foreseeable future. In addition, we may be limited in our ability to pay
dividends to our stockholders under our credit facility. Refer to “Financial Position, Capital Resources and
Liquidity” within Management’s Discussion and Analysis and Note 7 to the Consolidated Financial Statements
for further discussion of our credit facility.

Stock Compensation Plans

The following table contains certain information regarding our equity compensation plans.

Plan Category

Equity Compensation plans approved by

security holders

Equity Compensation plans not approved by

security holders

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)

3,065,067

480,000

$27.99

$36.99

6,129,414

—

The number of securities to be issued upon exercise of outstanding options, warrants and rights issued under

equity compensation plans approved by security holders includes 661.4 thousand restricted stock units and
deferred stock units issued to employees, non-employees and directors of Under Armour; these restricted stock
units and deferred stock units are not included in the weighted average exercise price calculation above. The
number of securities remaining available for future issuance includes 5.3 million shares of our Class A Common

Stock under our Amended and Restated 2005 Omnibus Long-Term Incentive Plan (“2005 Stock Plan”) and
0.8 million shares of our Class A Common Stock under our Employee Stock Purchase Plan. In addition to
securities issued upon the exercise of stock options, warrants and rights, the 2005 Stock Plan authorizes the
issuance of restricted and unrestricted shares of our Class A Common Stock and other equity awards. Refer to
Note 13 to the Consolidated Financial Statements for information required by this Item regarding the material
features of each plan.

The number of securities issued under equity compensation plans not approved by security holders includes

480.0 thousand fully vested and non-forfeitable warrants granted in 2006 to NFL Properties LLC as partial
consideration for footwear promotional rights. Refer to Note 13 to the Consolidated Financial Statements for a
further discussion on the warrants.

Recent Sales of Unregistered Equity Securities

On January 31, 2012, we issued 10.0 thousand shares of Class A Common Stock upon the exercise of
previously granted stock options to an employee at an exercise price of $0.83 per share, for an aggregate amount
of consideration of $8.3 thousand.

The issuances of securities described above were made in reliance upon Section 4(2) under the Securities
Act in that any issuance did not involve a public offering or under Rule 701 promulgated under the Securities
Act, in that they were offered and sold either pursuant to written compensatory plans or pursuant to a written
contract relating to compensation, as provided by Rule 701.

Stock Performance Graph

The stock performance graph below compares cumulative total return on Under Armour, Inc. Class A
Common Stock to the cumulative total return of the NYSE Market Index and S&P 500 Apparel, Accessories and
Luxury Goods Index from December 31, 2006 through December 31, 2011. The graph assumes an initial
investment of $100 in Under Armour and each index as of December 31, 2006 and reinvestment of any
dividends. The performance shown on the graph below is not intended to forecast or be indicative of possible
future performance of our common stock.

S
R
A
L
L
O
D

160.00

140.00

120.00

100.00

80.00

60.00

40.00

12/31/2006

12/31/2007

12/31/2008

12/31/2009

12/31/2010

12/31/2011

UNDER ARMOUR, INC.
NYSE MARKET INDEX
S&P 500 APPAREL, ACCESSORIES & LUXURY GOODS

Under Armour, Inc.
NYSE Market Index
S&P 500 Apparel, Accessories & Luxury

12/31/2006

12/31/2007

12/31/2008

12/31/2009

12/31/2010

12/31/2011

$100.00
$100.00

$ 86.56
$109.14

$47.25
$66.42

$54.05
$85.40

$108.70
$ 97.01

$142.30
$ 93.45

Goods

$100.00

$ 69.55

$46.07

$74.86

$105.70

$131.66

ITEM 6. SELECTED FINANCIAL DATA

The following selected financial data is qualified by reference to, and should be read in conjunction with,
the Consolidated Financial Statements, including the notes thereto, and “Management’s Discussion and Analysis
of Financial Condition and Results of Operations” included elsewhere in this Form 10-K.

(In thousands, except per share amounts)

2011

2010

2009

2008

2007

Year Ended December 31,

Net revenues
Cost of goods sold

Gross profit

Selling, general and administrative expenses

Income from operations

Interest income (expense), net
Other income (expense), net

Income before income taxes

Provision for income taxes

Net income

Net income available per common share
Basic
Diluted

Weighted average common shares outstanding
Basic
Diluted

Dividends declared

$
$

$1,472,684
759,848

$1,063,927
533,420

$856,411
446,286

$725,244
372,203

$606,561
302,083

712,836
550,069

162,767
(3,841)
(2,064)

156,862
59,943
96,919

1.88
1.85

$
$

530,507
418,152

112,355
(2,258)
(1,178)

108,919
40,442
68,477

410,125
324,852

353,041
276,116

304,478
218,213

85,273
(2,344)
(511)

76,925
(850)
(6,175)

86,265
749
2,029

82,418
35,633
$ 46,785

69,900
31,671
$ 38,229

89,043
36,485
$ 52,558

1.35
1.34

$
$

0.94
0.92

$
$

0.78
0.76

$
$

1.09
1.05

51,570
52,526

50,798
51,282

49,848
50,650

49,086
50,342

48,345
50,141

— $

— $ — $ — $ —

At December 31,

(In thousands)

2011

2010

2009

2008

2007

Cash and cash equivalents
Working capital (1)
Inventories
Total assets
Total debt and capital lease obligations, including

current maturities

Total stockholders’ equity

$ 175,384
506,056
324,409
919,210

$ 203,870
406,703
215,355
675,378

$187,297
327,838
148,488
545,588

$102,042
263,313
182,232
487,555

$ 40,588
226,546
166,082
390,613

77,724
$ 636,432

15,942
$ 496,966

20,223
$399,997

45,591
$331,097

14,332
$280,485

(1) Working capital is defined as current assets minus current liabilities.

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS

The information contained in this section should be read in conjunction with our Consolidated Financial

Statements and related notes and the information contained elsewhere in this Form 10-K under the captions
“Risk Factors,” “Selected Financial Data,” and “Business.”

Overview

We are a leading developer, marketer and distributor of branded performance apparel, footwear and
accessories. The brand’s moisture-wicking fabrications are engineered in many different designs and styles for
wear in nearly every climate to provide a performance alternative to traditional products. Our products are sold
worldwide and worn by athletes at all levels, from youth to professional, on playing fields around the globe, as
well as by consumers with active lifestyles.

Our net revenues grew to $1,472.7 million in 2011 from $606.6 million in 2007. We believe that our growth

in net revenues has been driven by a growing interest in performance products and the strength of the Under
Armour brand in the marketplace. We plan to continue to increase our net revenues over the long term by
increased sales of our apparel, footwear and accessories, expansion of our wholesale distribution sales channel,
growth in our direct to consumer sales channel and expansion in international markets. Our direct to consumer
sales channel includes our factory house and specialty stores and websites. New offerings for 2011 include hats
and bags, as well as CHARGED COTTON® products.

Our products are currently offered in approximately twenty five thousand retail stores worldwide. A large

majority of our products are sold in North America; however, we believe our products appeal to athletes and
consumers with active lifestyles around the globe. Outside of North America, our products are offered primarily
in Austria, France, Germany, Ireland and the United Kingdom, as well as in Japan through a licensee, and
through distributors located in other foreign countries. We hold a minority investment in our licensee in Japan.

Our operating segments are geographic and include North America; Latin America; Europe, the Middle East

and Africa (“EMEA”); and Asia. Due to the insignificance of the EMEA, Latin America and Asia operating
segments, they have been combined into other foreign countries for disclosure purposes.

We believe there is an increasing recognition of the health benefits of an active lifestyle. We believe this

trend provides us with an expanding consumer base for our products. We also believe there is a continuing shift
in consumer demand from traditional non-performance products to our performance products, which are intended
to provide better performance by wicking perspiration away from the skin, helping to regulate body temperature
and enhancing comfort. We believe that these shifts in consumer preferences and lifestyles are not unique to the
United States, but are occurring in a number of markets globally, thereby increasing our opportunities to
introduce our performance products to new consumers.

Although we believe these trends will facilitate our growth, we also face potential challenges that could
limit our ability to take advantage of these opportunities, including, among others, the risk of general economic
or market conditions that could affect consumer spending and the financial health of our retail customers. In
addition, we may not be able to effectively manage our growth and a more complex business. We may not
consistently be able to anticipate consumer preferences and develop new and innovative products that meet
changing preferences in a timely manner. Furthermore, our industry is very competitive, and competition
pressures could cause us to reduce the prices of our products or otherwise affect our profitability. We also rely on
third-party suppliers and manufacturers outside the U.S. to provide fabrics and to produce our products, and
disruptions to our supply chain could harm our business. For a more complete discussion of the risks facing our
business, refer to the “Risk Factors” section included in Item 1A.

General

Net revenues comprise both net sales and license revenues. Net sales comprise sales from our primary
product categories, which are apparel, footwear and accessories. Our license revenues consist of fees paid to us
by our licensees in exchange for the use of our trademarks on core products of socks, team uniforms, baby and
kids’ apparel, eyewear, custom-molded mouth guards, as well as the distribution of our products in Japan. Prior
to 2011, hats and bags were sold by a licensee. Net revenues increased by approximately $65 million from 2010
to 2011 as a result of developing our own hats and bags, which includes an increase in accessories revenues and a
decrease in our license revenues in 2011. In addition, related cost of goods sold increased.

Cost of goods sold consists primarily of product costs, inbound freight and duty costs, outbound freight
costs, handling costs to make products floor-ready to customer specifications, royalty payments to endorsers
based on a predetermined percentage of sales of selected products and write downs for inventory obsolescence.
The fabrics in many of our products are made primarily of petroleum-based synthetic materials. Therefore our
product costs, as well as our inbound and outbound freight costs, could be affected by long term pricing trends of

oil. In general, as a percentage of net revenues, we expect cost of goods sold associated with our apparel and
accessories to be lower than that of our footwear. No cost of goods sold is associated with license revenues.

We include outbound freight costs associated with shipping goods to customers as cost of goods sold;

however, we include the majority of outbound handling costs as a component of selling, general and
administrative expenses. As a result, our gross profit may not be comparable to that of other companies that
include outbound handling costs in their cost of goods sold. Outbound handling costs include costs associated
with preparing goods to ship to customers and certain costs to operate our distribution facilities. These costs were
$26.1 million, $14.7 million and $12.2 million for the years ended December 31, 2011, 2010 and 2009,
respectively.

Our selling, general and administrative expenses consist of costs related to marketing, selling, product
innovation and supply chain and corporate services. Personnel costs are included in these categories based on the
employees’ function. Personnel costs include salaries, benefits, incentives and stock-based compensation related
to the employee. Our marketing costs are an important driver of our growth. Marketing costs consist primarily of
commercials, print ads, league, team, player and event sponsorships, amortization of footwear promotional rights
and depreciation expense specific to our in-store fixture program. In addition, marketing costs include costs
associated with our Special Make-Up Shop (“SMU Shop”) located at one of our distribution facilities where we
manufacture a limited number of products primarily for our league, team, player and event sponsorships. Selling
costs consist primarily of costs relating to sales through our wholesale channel, commissions paid to third parties
and the majority of our direct to consumer sales channel costs, including the cost of factory house and specialty
store leases. Product innovation and supply chain costs include our apparel, footwear and accessories product
innovation, sourcing and development costs, distribution facility operating costs, and costs relating to our Hong
Kong and Guangzhou, China offices which help support product development, manufacturing, quality assurance
and sourcing efforts. Corporate services primarily consist of corporate facility operating costs and company-wide
administrative expenses.

Other expense, net consists of unrealized and realized gains and losses on our derivative financial

instruments and unrealized and realized gains and losses on adjustments that arise from fluctuations in foreign
currency exchange rates relating to transactions generated by our international subsidiaries.

Results of Operations

The following table sets forth key components of our results of operations for the periods indicated, both in

dollars and as a percentage of net revenues:

(In thousands)

Net revenues
Cost of goods sold

Gross profit

Selling, general and administrative expenses

Income from operations

Interest expense, net
Other expense, net

Income before income taxes

Provision for income taxes

Year Ended December 31,
2010

2011

2009

$1,472,684
759,848

$1,063,927
533,420

$856,411
446,286

712,836
550,069

162,767
(3,841)
(2,064)

156,862
59,943

530,507
418,152

112,355
(2,258)
(1,178)

108,919
40,442

410,125
324,852

85,273
(2,344)
(511)

82,418
35,633

Net income

96,919

68,477

$ 46,785

(As a percentage of net revenues)

Net revenues
Cost of goods sold

Gross profit

Selling, general and administrative expenses

Income from operations

Interest expense, net
Other expense, net

Income before income taxes

Provision for income taxes

Net income

Year Ended December 31,

2011

100.0%
51.6

2010

100.0%
50.1

2009

100.0%
52.1

48.4
37.3

11.1
(0.3)
(0.1)

10.7
4.1

49.9
39.3

10.6
(0.3)
(0.1)

10.2
3.8

47.9
37.9

10.0
(0.3)
(0.1)

9.6
4.1

6.6%

6.4%

5.5%

Consolidated Results of Operations

Year Ended December 31, 2011 Compared to Year Ended December 31, 2010

Net revenues increased $408.8 million, or 38.4%, to $1,472.7 million in 2011 from $1,063.9 million in

2010. Net revenues by product category are summarized below:

(In thousands)

Apparel
Footwear
Accessories

Total net sales

License revenues

Year Ended December 31,

2011

2010

$ Change

% Change

$1,122,031
181,684
132,400

1,436,115
36,569

$ 853,493
127,175
43,882

1,024,550
39,377

$268,538
54,509
88,518

411,565
(2,808)

31.5%
42.9
201.7

40.2
(7.1)

38.4%

Total net revenues

$1,472,684

$1,063,927

$408,757

Net sales increased $411.5 million, or 40.2%, to $1,436.1 million in 2011 from $1,024.6 million in 2010 as

noted in the table above. The increase in net sales primarily reflects:

•

$152.7 million, or 62.2%, increase in direct to consumer sales, which include 26 additional factory
house stores, or a 48% increase, since December 31, 2010, along with the launch of our updated
e-commerce website;

unit growth driven by increased distribution and new offerings in multiple product categories, most
significantly in our training (including fleece and our new CHARGED COTTON® product), graphics
(primarily including Tech-Tees), baselayer, running, hunting and golf apparel categories, along with
running and basketball shoes; and

$88.5 million, or 201.7%, increase in wholesale accessories sales primarily due to bringing hats and
bags sales in-house effective January 2011.

License revenues decreased $2.8 million, or 7.1%, to $36.6 million for the year ended December 31, 2011

from $39.4 million during the same period in 2010. This decrease in license revenues was a result of a $9.7
million reduction in license revenues related to hats and bags, partially offset by increased sales by our licensees
due to increased distribution and continued unit volume growth.

Gross profit increased $182.3 million to $712.8 million for the year ended December 31, 2011 from $530.5
million for the same period in 2010. Gross profit as a percentage of net revenues, or gross margin, decreased 150
basis points to 48.4% for the year ended December 31, 2011 compared to 49.9% during the same period in 2010.
The decrease in gross margin percentage was primarily driven by the following:

•

approximate 110 basis point decrease driven primarily by higher apparel product input costs, now
including cotton, in the current year period. We expect the higher input costs will continue to
negatively impact apparel product margins through the first half of 2012. A smaller contributor to the
decrease was a lower percentage mix of higher margin North American wholesale apparel and Factory
House product sales in the current year period. A significant driver to the sales mix impact included a
lower percentage of higher margin baselayer and underwear product, partially due to the significant
expansion of training apparel product offerings, including fleece and the introduction of CHARGED
COTTON®; and

approximate 45 basis point decrease driven by a lower license revenues due to bringing hats and bags
sales in-house effective January 1, 2011. We do not expect this trend to continue beyond 2011
following the anniversary of this transition of our hats and bags sales in-house.

The above decreases were partially offset by the below increase:

•

approximate 10 basis point increase driven by a decreasing negative margin impact of sales apparel
discounts and returns.

Selling, general and administrative expenses increased $131.9 million to $550.1 million for the year ended

December 31, 2011 from $418.2 million for the same period in 2010. As a percentage of net revenues, selling,
general and administrative expenses decreased to 37.3% for the year ended December 31, 2011 from 39.3% for
the same period in 2010. These changes were primarily attributable to the following:

• Marketing costs increased $39.7 million to $167.9 million for the year ended December 31, 2011 from
$128.2 million for the same period in 2010 primarily due to increased sponsorships of events and
collegiate and professional teams and athletes, increased television and digital campaign costs,
including media campaigns for specific customers. As a percentage of net revenues, marketing costs
decreased to 11.4% for the year ended December 31, 2011 from 12.0% for the same period in 2010
primarily due to decreased marketing costs for specific customers as a percentage of net revenues.

•

Selling costs increased $44.2 million to $138.8 million for the year ended December 31, 2011 from
$94.6 million for the same period in 2010. This increase was primarily due to higher personnel and
other costs incurred for the continued expansion of our direct to consumer distribution channel and
higher selling personnel costs. As a percentage of net revenues, selling costs increased to 9.4% for the
year ended December 31, 2011 from 8.9% for the same period in 2010 primarily due to higher
personnel and other costs incurred for the continued expansion of our direct to consumer distribution
channel.

Product innovation and supply chain costs increased $32.3 million to $129.1 million for the year ended
December 31, 2011 from $96.8 million for the same period in 2010 primarily due to higher distribution
facilities operating and personnel costs to support our growth in net revenues and higher personnel
costs for the design and sourcing of our expanding apparel, footwear and accessories lines. As a
percentage of net revenues, product innovation and supply chain costs decreased to 8.8% for the year
ended December 31, 2011 from 9.1% for the same period in 2010 primarily due to decreased personnel
costs for the design and sourcing of our expanding apparel, footwear and accessories lines as a
percentage of net revenues.

• Corporate services costs increased $15.7 million to $114.3 million for the year ended December 31,
2011 from $98.6 million for the same period in 2010. This increase was attributable primarily to
increased corporate personnel, facility costs and information technology initiatives necessary to support
our growth. As a percentage of net revenues, corporate services costs decreased to 7.7% for the year
ended December 31, 2011 from 9.3% for the same period in 2010 primarily due to decreased corporate
personnel and facility costs as a percentage of net revenues, as well as the net impact of the acquisition
of our corporate headquarters in 2011. The acquisition is not expected to have a material impact to our
consolidated statements of income in future periods.

Income from operations increased $50.4 million, or 44.9%, to $162.8 million in 2011 from $112.4 million in

2010. Income from operations as a percentage of net revenues increased to 11.1% in 2011 from 10.6% in 2010.
This increase was a result of the items discussed above.

Interest expense, net increased $1.5 million to $3.8 million in 2011 from $2.3 million in 2010. This increase

was primarily due to the assumed loan for the acquisition of our corporate headquarters.

Other expense, net increased $0.9 million to $2.1 million in 2011 from $1.2 million in 2010. This increase

was due to higher net losses in 2011 on the combined foreign currency exchange rate changes on transactions
denominated in foreign currencies and our derivative financial instruments as compared to 2010.

Provision for income taxes increased $19.5 million to $59.9 million in 2011 from $40.4 million in 2010. Our

effective tax rate was 38.2% in 2011 compared to 37.1% in 2010, primarily due to federal and state tax credits
that reduced the effective tax rate in the prior year period, partially offset by the 2011 reversal of a valuation
allowance established in 2010 against a portion of our deferred tax assets related to foreign net operating loss
carryforwards.

Year Ended December 31, 2010 Compared to Year Ended December 31, 2009

Net revenues increased $207.5 million, or 24.2%, to $1,063.9 million in 2010 from $856.4 million in 2009.

Net revenues by product category are summarized below:

(In thousands)

Apparel
Footwear
Accessories

Total net sales

License revenues

Year Ended December 31,

2010

2009

$ Change

% Change

$ 853,493
127,175
43,882

1,024,550
39,377

$651,779
136,224
35,077

823,080
33,331

$201,714
(9,049)
8,805

201,470
6,046

30.9%
(6.6)
25.1

24.5
18.1

Total net revenues

$1,063,927

$856,411

$207,516

24.2%

Net sales increased $201.5 million, or 24.5%, to $1,024.6 million in 2010 from $823.1 million in 2009 as

noted in the table above. The increase in net sales primarily reflects:

•

$88.9 million, or 56.8%, increase in direct to consumer sales, which includes 19 additional stores in
2010; and

unit growth driven by increased distribution and new offerings in multiple product categories, most
significantly in our training, base layer, mountain, golf and underwear categories; partially offset by

$9.0 million decrease in footwear sales driven primarily by a decline in running and training footwear
sales.

License revenues increased $6.1 million, or 18.1%, to $39.4 million in 2010 from $33.3 million in 2009.

This increase in license revenues was primarily a result of increased sales by our licensees due to increased
distribution and continued unit volume growth. We have developed our own headwear and bags, and beginning
in 2011, these products are being sold by us rather than by one of our licensees.

Gross profit increased $120.4 million to $530.5 million in 2010 from $410.1 million in 2009. Gross profit as
a percentage of net revenues, or gross margin, increased 200 basis points to 49.9% in 2010 compared to 47.9% in
2009. The increase in gross margin percentage was primarily driven by the following:

•

approximate 100 basis point increase driven by increased direct to consumer higher margin sales;

approximate 50 basis point increase driven by decreased sales markdowns and returns, primarily due to
improved sell-through rates at retail; and

approximate 50 basis point increase driven primarily by liquidation sales and related inventory reserve
reversals. The current year period benefited from reversals of inventory reserves established in the
prior year relative to certain cleated footwear, sport specific apparel and gloves. These products have
historically been more difficult to liquidate at favorable prices.

Selling, general and administrative expenses increased $93.3 million to $418.2 million in 2010 from $324.9
million in 2009. As a percentage of net revenues, selling, general and administrative expenses increased to 39.3%
in 2010 from 37.9% in 2009. These changes were primarily attributable to the following:

• Marketing costs increased $19.3 million to $128.2 million in 2010 from $108.9 million in 2009
primarily due to an increase in sponsorship of events and collegiate and professional teams and
athletes, increased television and digital campaign costs, including media campaigns for specific
customers and additional personnel costs. In addition, we incurred increased expenses for our
performance incentive plan as compared to the prior year. As a percentage of net revenues, marketing
costs decreased to 12.0% in 2010 from 12.7% in 2009 primarily due to decreased marketing costs for
specific customers.

•

Selling costs increased $25.0 million to $94.6 million in 2010 from $69.6 million in 2009. This
increase was primarily due to higher personnel and other costs incurred for the continued expansion of
our direct to consumer distribution channel and higher selling personnel costs, including increased
expenses for our performance incentive plan as compared to the prior year. As a percentage of net
revenues, selling costs increased to 8.9% in 2010 from 8.1% in 2009 primarily due to higher personnel
and other costs incurred for the continued expansion of our factory house stores.

Product innovation and supply chain costs increased $25.0 million to $96.8 million in 2010 from $71.8
million in 2009 primarily due to higher personnel costs for the design and sourcing of our expanding
apparel, footwear and accessories lines and higher distribution facilities operating and personnel costs
as compared to the prior year to support our growth in net revenues. In addition, we incurred higher
expenses for our performance incentive plan as compared to the prior year. As a percentage of net
revenues, product innovation and supply chain costs increased to 9.1% in 2010 from 8.4% in 2009
primarily due to the items noted above.

• Corporate services costs increased $24.0 million to $98.6 million in 2010 from $74.6 million in 2009.
This increase was attributable primarily to higher corporate facility costs, information technology
initiatives and corporate personnel costs, including increased expenses for our performance incentive
plan as compared to the prior year. As a percentage of net revenues, corporate services costs increased
to 9.3% in 2010 from 8.7% in 2009 primarily due to the items noted above.

Income from operations increased $27.1 million, or 31.8%, to $112.4 million in 2010 from $85.3 million in
2009. Income from operations as a percentage of net revenues increased to 10.6% in 2010 from 10.0% in 2009.
This increase was a result of the items discussed above.

Interest expense, net remained unchanged at $2.3 million in 2010 and 2009.

Other expense, net increased $0.7 million to $1.2 million in 2010 from $0.5 million in 2009. The increase in

2010 was due to higher net losses on the combined foreign currency exchange rate changes on transactions
denominated in the Euro and Canadian dollar and our derivative financial instruments as compared to 2009.

Provision for income taxes increased $4.8 million to $40.4 million in 2010 from $35.6 million in 2009. Our

effective tax rate was 37.1% in 2010 compared to 43.2% in 2009, primarily due to tax planning strategies and
federal and state tax credits reducing the effective tax rate, partially offset by a valuation allowance recorded
against our foreign net operating loss carryforward.

Segment Results of Operations

Year Ended December 31, 2011 Compared to Year Ended December 31, 2010

Net revenues by geographic region are summarized below:

(In thousands)

North America
Other foreign countries

Year Ended December 31,

2011

2010

$ Change

% Change

$1,383,346
89,338

$ 997,816
66,111

$385,530
23,227

38.6%
35.1

38.4%

Total net revenues

$1,472,684

$1,063,927

$408,757

Net revenues in our North American operating segment increased $385.5 million to $1,383.3 million in
2011 from $997.8 million in 2010 primarily due to the items discussed above in the Consolidated Results of
Operations. Net revenues in other foreign countries increased by $23.2 million to $89.3 million in 2011 from
$66.1 million in 2010 primarily due to footwear shipments to our Dome licensee, as well as unit sales growth to
our distributors in our Latin American operating segment.

Operating income by geographic region is summarized below:

(In thousands)

North America
Other foreign countries

Total operating income

$162,767

$112,355

$50,412

Year Ended December 31,

2011

2010

$ Change % Change

$150,559
12,208

$102,806
9,549

$47,753
2,659

46.4%
27.8

44.9%

Operating income in our North American operating segment increased $47.8 million to $150.6 million in

2011 from $102.8 million in 2010 primarily due to the items discussed above in the Consolidated Results of
Operations. Operating income in other foreign countries increased by $2.7 million to $12.2 million in 2011 from
$9.5 million in 2010 primarily due to increased unit sales growth as discussed above, partially offset by higher
costs associated with our continued investment to support our international expansion in our EMEA, Asian and
Latin American operating segments.

Year Ended December 31, 2010 Compared to Year Ended December 31, 2009

Net revenues by geographic region are summarized below:

(In thousands)

North America
Other foreign countries

Total net revenues

Year Ended December 31,

2010

2009

$ Change

% Change

$ 997,816
66,111

$808,020
48,391

$189,796
17,720

$1,063,927

$856,411

$207,516

23.5%
36.6

24.2%

Net revenues in our North American operating segment increased $189.8 million to $997.8 million in 2010

from $808.0 million in 2009 primarily due to the items discussed above in the Consolidated Results of
Operations. Net revenues in other foreign countries increased by $17.7 million to $66.1 million in 2010 from
$48.4 million in 2009 primarily due to increased apparel unit sales in our EMEA operating segment and
increased product distribution by our licensee in Japan.

Operating income by geographic region is summarized below:

(In thousands)

North America
Other foreign countries

Total operating income

$112,355

$85,273

$27,082

Year Ended December 31,

2010

2009

$ Change % Change

$102,806
9,549

$83,239
2,034

$19,567
7,515

23.5%
369.5

31.8%

Operating income in our North American operating segment increased $19.6 million to $102.8 million in

2010 from $83.2 million in 2009 primarily due to the items discussed above in the Consolidated Results of
Operations. Operating income in other foreign countries increased by $7.5 million to $9.5 million in 2010 from
$2.0 million in 2009 primarily due to increased unit sales growth as discussed above, partially offset by higher
costs associated with our continued investment to support our international expansion in our EMEA, Asian and
Latin American operating segments.

Seasonality

Historically, we have recognized a significant portion of our income from operations in the last two quarters

of the year, driven primarily by increased sales volume of our products during the fall selling season, reflecting

our historical strength in fall sports, and the seasonality of our higher priced COLDGEAR® line. The majority of
our net revenues were generated during the last two quarters in each of 2011, 2010 and 2009. The level of our
working capital generally reflects the seasonality and growth in our business.

The following table sets forth certain financial information for the periods indicated. The data is prepared on

the same basis as the audited consolidated financial statements included elsewhere in this Form 10-K. All
recurring, necessary adjustments are reflected in the data below.

(In thousands)

Net revenues
Gross profit
Marketing SG&A expenses
Other SG&A expenses
Income from operations

(As a percentage of annual totals)

Net revenues
Gross profit
Marketing SG&A expenses
Other SG&A expenses
Income from operations

Mar 31,
2011

Jun 30,
2011

Sep 30,
2011

Dec 31,
2011

Mar 31,
2010

Jun 30,
2010

Sep 30,
2010

Dec 31,
2010

Quarter Ended

$312,699 $291,336 $465,523 $403,126 $229,407 $204,786 $328,568 $301,166
155,578
33,539
86,849
35,190

145,051
41,437
82,472
21,142

225,101
48,450
101,686
74,965

134,779
34,136
89,285
11,358

167,372
36,015
74,668
56,689

207,905
43,883
108,720
55,302

107,631
31,198
62,849
13,584

99,926
27,438
65,596
6,892

21.2%
20.3%
24.7%
21.6%
13.0%

19.8%
18.9%
20.3%
23.4%
7.0%

31.6%
31.6%
28.9%
26.6%
46.0%

27.4%
29.2%
26.1%
28.4%
34.0%

21.6%
20.3%
24.3%
21.7%
12.1%

19.2%
18.8%
21.4%
22.6%
6.1%

30.9%
31.6%
28.1%
25.8%
50.5%

28.3%
29.3%
26.2%
29.9%
31.3%

Financial Position, Capital Resources and Liquidity

Our cash requirements have principally been for working capital and capital expenditures. We fund our
working capital, primarily inventory, and capital investments from cash flows from operating activities, cash and
cash equivalents on hand and borrowings available under our credit and long term debt facilities. Our working
capital requirements generally reflect the seasonality and growth in our business as we recognize the majority of
our net revenues in the back half of the year. Our capital investments have included expanding our in-store
fixture and branded concept shop program, improvements and expansion of our distribution and corporate
facilities to support our growth, leasehold improvements to our new factory house and specialty stores, and
investment and improvements in information technology systems. Our capital expenditures in 2011 included the
acquisition of our corporate headquarters for $60.5 million along with approximately $2.2 million in additional
related investments and improvements. In connection with the acquisition, we assumed a $38.6 million loan
secured by the acquired property. The remaining purchase price was funded through a $25.0 million term loan. A
$1.0 million deposit was paid upon signing the purchase agreement in November 2010.

Our inventory strategy is focused on continuing to meet consumer demand while improving our inventory

efficiency over the long term by putting systems and processes in place to improve our inventory
management. These systems and processes are designed to improve our forecasting and supply planning
capabilities. In addition to systems and processes, key areas of focus that we believe will enhance inventory
performance are SKU rationalization, added discipline around the purchasing of product, production lead time
reduction, and better planning and execution in selling of excess inventory through our factory house stores and
other liquidation channels. With regards to SKU rationalization, we anticipate a reduction of our total number of
SKUs by approximately 20% from 2011 to 2012.

We believe our cash and cash equivalents on hand, cash from operations and borrowings available to us under our

credit and long term debt facilities will be adequate to meet our liquidity needs and capital expenditure requirements
for at least the next twelve months. We may require additional capital to meet our longer term liquidity and future
growth needs. Although we believe we have adequate sources of liquidity over the long term, a prolonged economic
recession or a slow recovery could adversely affect our business and liquidity (refer to the “Risk Factors” section
included in Item 1A). In addition, instability in or tightening of the capital markets could adversely affect our ability to
obtain additional capital to grow our business and will affect the cost and terms of such capital.

Cash Flows

The following table presents the major components of net cash flows used in and provided by operating,

investing and financing activities for the periods presented:

(In thousands)

Net cash provided by (used in):
Operating activities
Investing activities
Financing activities
Effect of exchange rate changes on cash and cash

Year Ended December 31,

2011

2010

2009

$ 15,218
(89,436)
45,807

$ 50,114
(41,785)
7,243

$119,041
(19,880)
(16,467)

equivalents

(75)

1,001

2,561

Net increase (decrease) in cash and cash equivalents

$(28,486)

$ 16,573

$ 85,255

Operating Activities

Operating activities consist primarily of net income adjusted for certain non-cash items. Adjustments to net

income for non-cash items include depreciation and amortization, unrealized foreign currency exchange rate
gains and losses, losses on disposals of property and equipment, stock-based compensation, deferred income
taxes and changes in reserves and allowances. In addition, operating cash flows include the effect of changes in
operating assets and liabilities, principally inventories, accounts receivable, income taxes payable and receivable,
prepaid expenses and other assets, accounts payable and accrued expenses.

Cash provided by operating activities decreased $34.9 million to $15.2 million in 2011 from $50.1 million

in 2010. The decrease in cash provided by operating activities was due to decreased net cash flows from
operating assets and liabilities of $86.8 million, partially offset by an increase in net income of $28.4 million and
adjustments to net income for non-cash items which increased $23.5 million year over year. The decrease in net
cash flows related to changes in operating assets and liabilities period over period was primarily driven by the
following:

•

an increase in inventory investments of $49.4 million. In line with our prior guidance, inventory grew
at a rate higher than net sales growth due to higher input costs and increased safety stock in core
product offerings and seasonal products; and

a larger increase in prepaid expenses and other assets of $38.5 million in 2011 as compared to 2010
primarily due to income taxes paid during the last six months of 2011, related to our 2011 tax planning
strategies, that will be recognized in income tax expense in future periods.

Adjustments to net income for non-cash items increased in 2011 as compared to 2010 primarily due to a

decrease in deferred taxes in 2011 as compared to an increase in deferred taxes in 2010.

Cash provided by operating activities decreased $68.9 million to $50.1 million in 2010 from $119.0 million

in 2009. The decrease in cash provided by operating activities was due to decreased net cash flows from
operating assets and liabilities of $99.1 million, partially offset by an increase in net income of $21.7 million and
adjustments to net income for non-cash items which increased $8.5 million year over year. The decrease in net
cash flows related to changes in operating assets and liabilities period over period was primarily driven by the
following:

•

an increase in net inventory investments of $98.2 million, partially offset by an increase in accounts
payable of $20.5 million. In line with our prior guidance, inventory grew in the fourth quarter of 2010
at a rate higher than net sales growth due to increased safety stock, primarily COLDGEAR®, to better
meet anticipated consumer demand, investments around new products in 2011 including headwear,

bags and CHARGED COTTON®, and continued increases in our made-for strategy across our factory
house store base. In 2009, operational initiatives were put in place to improve our inventory
management which assisted in the decrease of inventory for that period; and

an increase in accounts receivable during 2010 primarily due to a 36.9% increase in net sales during the
fourth quarter of 2010; partially offset by

higher income taxes payable in 2010 as compared to 2009.

•

Adjustments to net income for non-cash items increased in 2010 as compared to 2009 primarily due to
unrealized foreign currency exchange rate losses in 2010 as compared to unrealized foreign currency exchange
rate gains in 2009.

Investing Activities

Cash used in investing activities increased $47.6 million to $89.4 million in 2011 from $41.8 million in
2010. This increase in cash used in investing activities was primarily due to the acquisition of our corporate
headquarters and increased investments in our direct to consumer sales channel, in-store fixture program and
corporate and distribution facilities. In addition, in connection with the assumed loan for the acquisition of our
corporate headquarters, we were required to set aside $5.0 million in restricted cash. Refer to Note 7 of the
consolidated financial statements for a discussion of restricted cash.

Cash used in investing activities increased $21.9 million to $41.8 million in 2010 from $19.9 million in
2009. This increase in cash used in investing activities was primarily due to increased investments in new factory
house stores and corporate and distribution facilities, partially offset by lower investments in our in-store fixture
program and branded concept shops. In addition, cash used in investing activities increased due to a deposit made
in late December 2010 for a minority investment completed in early 2011 in Dome Corporation, our Japanese
licensee.

Total capital expenditures were $115.4 million, $33.1 million and $24.6 million in 2011, 2010 and 2009,
respectively, which includes the acquisition of our corporate headquarters and other related expenditures in 2011.
Total capital expenditures in 2011, 2010 and 2009 included non-cash transactions of $36.0 million, $2.9 million
and $4.8 million, respectively. Because we receive certain capital expenditures prior to transmitting payment for
these capital investments, total capital expenditures exceed capital investments included in our consolidated
statements of cash flows. Capital expenditures for 2012 are expected to be in the range of $60 million to $65
million.

Financing Activities

Cash provided by financing activities increased $38.6 million to $45.8 million in 2011 from $7.2 million in

2010. This increase was primarily due to the term loan borrowed under the credit facility to partially fund the
purchase of our corporate headquarters, as well as excess tax benefits and proceeds from stock-based
compensation arrangements.

Cash provided by financing activities increased $23.7 million to $7.2 million in 2010 from cash used in
financing activities of $16.5 million in 2009. This increase was primarily due to the final payment made on our
prior revolving credit facility that was terminated during 2009.

Credit Facility

In March 2011, we entered into a new $325.0 million credit facility with certain lending institutions and
terminated our prior $200.0 million revolving credit facility in order to increase our available financing and to
expand our lending syndicate. The credit facility has a term of four years and provides for a committed revolving

credit line of up to $300.0 million, in addition to a $25.0 million term loan facility. The commitment amount
under the revolving credit facility may be increased by an additional $50.0 million, subject to certain conditions
and approvals as set forth in the credit agreement. We incurred and capitalized $1.6 million in deferred financing
costs in connection with the credit facility.

The credit facility may be used for working capital and general corporate purposes and is collateralized by

substantially all of our assets and certain of our domestic subsidiaries (other than trademarks and the land,
buildings and other assets comprising our corporate headquarters) and by a pledge of 65% of the equity interests
of certain of our foreign subsidiaries. Up to $5.0 million of the facility may be used to support letters of credit, of
which none were outstanding as of December 31, 2011. We are required to maintain a certain leverage ratio and
interest coverage ratio as set forth in the credit agreement. As of December 31, 2011, we were in compliance
with these ratios. The credit agreement also provides the lenders with the ability to reduce the borrowing base,
even if we are in compliance with all conditions of the credit agreement, upon a material adverse change to the
business, properties, assets, financial condition or results of operations. The credit agreement contains a number
of restrictions that limit our ability, among other things, and subject to certain limited exceptions, to incur
additional indebtedness, pledge our assets as security, guaranty obligations of third parties, make investments,
undergo a merger or consolidation, dispose of assets, or materially change our line of business. In addition, the
credit agreement includes a cross default provision whereby an event of default under other debt obligations, as
defined in the credit agreement, will be considered an event of default under the credit agreement.

Borrowings under the credit facility bear interest based on the daily balance outstanding at LIBOR (with no

rate floor) plus an applicable margin (varying from 1.25% to 1.75%) or, in certain cases a base rate (based on a
certain lending institution’s Prime Rate or as otherwise specified in the credit agreement, with no rate floor) plus
an applicable margin (varying from 0.25% to 0.75%). The credit facility also carries a commitment fee equal to
the unused borrowings multiplied by an applicable margin (varying from 0.25% to 0.35%). The applicable
margins are calculated quarterly and vary based on our leverage ratio as set forth in the credit agreement.

Upon entering into the credit facility in March 2011, we terminated our prior $200.0 million revolving credit

facility. The prior revolving credit facility was collateralized by substantially all of our assets, other than
trademarks, and included covenants, conditions and other terms similar to our new credit facility.

In May 2011, we borrowed $25.0 million under the term loan facility to finance a portion of the acquisition
of our corporate headquarters. The interest rate on the term loan was 1.5% during the year ended December 31,
2011. The maturity date of the term loan is March 2015, which is the end of the credit facility term. In early
2013, we expect to refinance both the term loan and the loan assumed in the acquisition of our corporate
headquarters. During the three months ended September 30, 2011, we borrowed $30.0 million under the
revolving credit facility to fund seasonal working capital requirements and repaid it during the three months
ended December 31, 2011. The interest rate under the revolving credit facility was 1.5% during the year ended
December 31, 2011, and no balance was outstanding as of December 31, 2011. No balances were outstanding
under the prior revolving credit facility during the year ended December 31, 2010.

Long Term Debt

We have long term debt agreements with various lenders to finance the acquisition or lease of qualifying
capital investments. Loans under these agreements are collateralized by a first lien on the related assets acquired.
As these agreements are not committed facilities, each advance is subject to approval by the lenders.
Additionally, these agreements include a cross default provision whereby an event of default under other debt
obligations, including our credit facility, will be considered an event of default under these agreements. These
agreements require a prepayment fee if we pay outstanding amounts ahead of the scheduled terms. The terms of
the credit facility limit the total amount of additional financing under these agreements to $40.0 million, of which
$21.5 million was available for additional financing as of December 31, 2011. At December 31, 2011 and 2010,
the outstanding principal balance under these agreements was $14.5 million and $15.9 million, respectively.

Currently, advances under these agreements bear interest rates which are fixed at the time of each advance. The
weighted average interest rates on outstanding borrowings were 3.5%, 5.3% and 5.9% for the years ended
December 31, 2011, 2010 and 2009, respectively.

We monitor the financial health and stability of our lenders under our credit and long term debt facilities,

however during any period of instability in the credit markets lenders could be negatively impacted in their
ability to perform under these facilities.

In July 2011, in connection with the acquisition of our corporate headquarters, we assumed a $38.6 million
nonrecourse loan secured by a mortgage on the acquired property. The acquisition of our corporate headquarters
was accounted for as a business combination, and the carrying value of the loan secured by the acquired property
approximates fair value. The assumed loan had an original term of approximately ten years with a scheduled
maturity date of March 1, 2013. The loan includes a balloon payment of $37.3 million due at maturity, and may
not be prepaid. The assumed loan is a nonrecourse loan with the lender’s remedies for non-performance limited
to action against the acquired property and certain required reserves and a cash collateral account, except for
nonrecourse carveouts related to fraud, breaches of certain representations, warranties or covenants, including
those related to environmental matters, and other standard carveouts for a loan of this type. The loan requires
certain minimum cash flows and financial results from the property, and if those requirements are not met,
additional reserves may be required. The assumed loan requires prior approval of the lender for certain matters
related to the property, including material leases, changes to property management, transfers of any part of the
property and material alterations to the property. The loan has an interest rate of 6.73%. In connection with the
assumed loan, we incurred and capitalized $0.8 million in deferred financing costs. As of December 31, 2011, the
outstanding balance on the loan was $38.2 million. In addition, in connection with the assumed loan for the
acquisition of our corporate headquarters, we were required to set aside amounts in reserve and cash collateral
accounts. As of December 31, 2011, $2.0 million of restricted cash was included in prepaid expenses and other
current assets, and the remaining $3.0 million of restricted cash was included in other long term assets.

Acquisitions

In July 2011, we acquired approximately 400.0 thousand square feet of office space comprising part of our

corporate headquarters for $60.5 million. The acquisition included land, buildings, tenant improvements and
third party lease-related intangible assets. As of the purchase date, 163.6 thousand square feet of the
400.0 thousand square feet of office space acquired was leased to third party tenants. These leases had remaining
lease terms ranging from 9 months to 15 years as of the purchase date. We intend to occupy additional space as it
becomes available. Since the acquisition, we have invested $2.2 million in additional improvements.

The acquisition included the assumption of a $38.6 million loan secured by the property and the remaining

purchase price was paid in cash funded primarily by a $25.0 million term loan borrowed in May 2011. The
carrying value of the assumed loan approximated its fair value on the date of the acquisition. Refer above and to
Note 7 to the Consolidated Financial Statements for a discussion of the assumed loan and term loan. A $1.0
million deposit was paid upon signing the purchase agreement in November 2010.

The aggregate fair value of the acquisition was $63.8 million. The fair value was estimated using a

combination of market, income and cost approaches. The acquisition was accounted for as a business
combination, and as such we recognized a bargain purchase gain of $3.3 million as the amount by which the fair
value of the net assets acquired exceeded the fair value of the purchase price.

In connection with this acquisition, we incurred acquisition related expenses of approximately $1.9 million.

Both the acquisition related expenses and pre-tax bargain purchase gain were included in selling, general and
administrative expenses on the consolidated statements of income during the year ended December 31, 2011.
This transaction is not expected to have a material impact to our consolidated statements of income in future
periods.

We believe that we were able to negotiate the acquisition of the net assets for less than fair value because
the seller marketed the property in a limited manner, and thus the property did not have adequate exposure to the
market prior to the measurement date to allow for marketing activities that are usual and customary for real estate
transactions. In addition, we were the majority tenant immediately prior to the acquisition and were willing and
qualified to assume the secured loan.

Contractual Commitments and Contingencies

We lease warehouse space, office facilities, space for our factory house and specialty stores and certain

equipment under non-cancelable operating and capital leases. The leases expire at various dates through 2023,
excluding extensions at our option, and contain various provisions for rental adjustments. In addition, this table
includes executed lease agreements for factory house stores that we did not yet occupy as of December 31, 2011.
The operating leases generally contain renewal provisions for varying periods of time. Our significant contractual
obligations and commitments as of December 31, 2011 are summarized in the following table:

(in thousands)

Contractual obligations
Long term debt obligations (1)
Operating lease obligations (2)
Product purchase obligations (3)
Sponsorships and other (4)

Total

Payments Due by Period

Total

Less Than
1 Year

1 to 3 Years

3 to 5 Years

More Than
5 Years

$ 77,724
185,178
288,724
169,514

6,882
22,926
288,724
52,855

$ 68,891
49,511
—
89,424

$ 1,951
43,697
—
26,269

$ —

69,044
—
966

$721,140

$371,387

$207,826

$71,917

$70,010

(1) Excludes a total of $4.0 million in interest payments on long term debt obligations. Includes the repayment
of $25.0 million borrowed under the term loan facility which is due in March 2015 but is planned to be
refinanced in early 2013 with the loan assumed in the acquisition of our corporate headquarters.

(2)

Includes the minimum payments for operating lease obligations. The operating lease obligations do not
include any contingent rent expense we may incur at our 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 $3.6 million for the year ended December 31, 2011.

(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 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 reported amounts exclude product purchase liabilities included in accounts payable as of
December 31, 2011. When compared to the product purchase obligation included in our 2010 Form 10-K,
product purchase obligations have decreased by 19% primarily due to the timing of product purchases and
improvements in inventory management.

(4)

Includes footwear promotional rights fees, sponsorships of individual athletes, sports teams and 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 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,
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. In addition, it is not possible to determine the amounts we may be required to pay under these
agreements as they are primarily subject to certain performance based variables. The amounts listed above
are the fixed minimum amounts required to be paid under these agreements.

The table above excludes a liability of $11.2 million for uncertain tax positions, including the related

interest and penalties, recorded in accordance with applicable accounting guidance, as we are unable to
reasonably estimate the timing of settlement. Refer to Note 11 to the Consolidated Financial Statements for a
further discussion of our uncertain tax positions.

Off-Balance Sheet Arrangements

In connection with various contracts and agreements, we have 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 our counterparties are grossly negligent,
engage in willful misconduct, or act in bad faith. Based on our historical experience and the estimated probability
of future loss, we have determined the fair value of such indemnifications is not material to our financial position
or results of operations.

Critical Accounting Policies and Estimates

Our consolidated financial statements have been prepared in accordance with accounting principles
generally accepted in the United States of America. 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.

Revenue Recognition

Net revenues consist of both net sales and license revenues. Net sales are recognized upon transfer of
ownership, including passage of title to the customer and transfer of risk of loss related to those goods. Transfer
of title and risk of loss are based upon shipment under free on board shipping point for most goods or upon
receipt by the customer depending on the country of the sale and the agreement with the customer. In some
instances, transfer of title and risk of loss take place at the point of sale, for example at our retail stores. We may
also ship product directly from our supplier to the customer and recognize revenue when the product is delivered
to and accepted by the customer. License revenues are recognized based upon shipment of licensed products sold
by our licensees. Sales taxes imposed on our revenues from product sales are presented on a net basis on the
consolidated statements of income and therefore do not impact net revenues or costs of goods sold.

We record reductions to revenue for estimated customer returns, allowances, markdowns and discounts. We
base our 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 is 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 recorded as an offset to accounts
receivable as settlements are made through offsets to outstanding customer invoices. As of December 31, 2011
and 2010, there were $27.1 million and $25.2 million, respectively, in reserves for customer returns, allowances,
markdowns and discounts.

Allowance for Doubtful Accounts

We make ongoing estimates relating to the collectability of our accounts receivable and maintain a reserve
for estimated losses resulting from the inability of our customers to make required payments. In determining the
amount of the reserve, we consider our 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 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, future losses from
uncollectible accounts may differ from our estimates. If the financial condition of our customers were to
deteriorate, resulting in their inability to make payments, a larger reserve might be required. In the event we
determine that a smaller or larger reserve was appropriate, we would record a benefit or charge to selling, general
and administrative expenses in the period in which we made such a determination.

Inventory Valuation and Reserves

We value our inventory at standard cost which approximates our landed cost, using the first-in, first-out
method of cost determination. Market value is estimated based upon assumptions made about future demand and
retail market conditions. If we determine that the estimated market 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 market.
If actual market conditions are less favorable than those projected by us, further adjustments may be required that
would increase our cost of goods sold in the period in which we make such a determination.

Impairment of Long-Lived Assets

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. Impairments are recognized in earnings to the extent that the carrying value exceeds fair value. No
material impairments were recorded in the years ended December 31, 2011, 2010 and 2009.

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.

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.

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 statements of income.

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, 2011, we had $24.6 million of unrecognized

compensation expense, excluding performance-based equity awards, expected to be recognized over a weighted
average period of 1.9 years. As of December 31, 2011, we had $7.3 million of unrecognized compensation
expense related to performance-based stock options expected to be recognized over a weighted average period of
1.8 years.

Determining the appropriate fair value model and calculating the fair value of stock-based compensation

awards require the input of highly subjective assumptions, including the expected life of the stock-based
compensation awards, stock price volatility and estimated forfeiture rates. We use the Black-Scholes option-
pricing model to determine the fair value of stock-based compensation awards. 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 target is deemed probable, which requires management judgment. For example, the achievement of
the operating income targets related to the performance-based restricted stock units granted in 2011 were not
deemed probable as of December 31, 2011. Additional stock-based compensation of up to $5.6 million would
have been recorded in 2011 for these performance-based restricted stock units had the full achievement of these
operating targets been deemed probable. As a result, if factors change and we use different assumptions, our
stock-based compensation expense could be materially different in the future. Refer to Note 2 and Note 13 to the
Consolidated Financial Statements for a further discussion on stock-based compensation.

Recently Issued Accounting Standards

In June 2011, the Financial Accounting Standards Board (“FASB”) issued an Accounting Standards Update
which eliminates the option to report other comprehensive income and its components in the statement of changes
in stockholders’ equity. It requires an entity to present total comprehensive income, which includes the components
of net income and the components of other comprehensive income, either in a single continuous statement or in two
separate but consecutive statements. In December 2011, the FASB issued an amendment to this pronouncement
which defers the specific requirement to present components of reclassifications of other comprehensive income on
the face of the income statement. These pronouncements are effective for financial statements issued for fiscal
years, and interim periods within those years, beginning after December 15, 2011. We believe the adoption of these
pronouncements will not have a material impact on our consolidated financial statements.

In May 2011, the FASB issued an Accounting Standards Update which clarifies the requirements for how to

measure fair value and for disclosing information about fair value measurements common to accounting
principles generally accepted in the United States of America and International Financial Reporting Standards.
This guidance is effective for interim and annual periods beginning on or after December 15, 2011. We believe
the adoption of this guidance will not have a material impact on our consolidated financial statements.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

Foreign Currency Exchange and Foreign Currency Risk Management and Derivatives

We currently generate a small amount of our consolidated net revenues in Canada and Europe. The
reporting currency for our consolidated financial statements is the U.S. dollar. To date, net revenues generated
outside of the United States have not been significant. However, as our net revenues generated outside of the
United States increase, our results of operations could be adversely impacted by changes in foreign currency
exchange rates. For example, if we recognize foreign revenues in local foreign currencies (as we currently do in
Canada and Europe) and if the U.S. dollar strengthens, it could have a negative impact on our foreign revenues
upon translation of those results into the U.S. dollar upon consolidation of our financial statements. In addition,
we are exposed to gains and losses resulting from fluctuations in foreign currency exchange rates on transactions
generated by our foreign subsidiaries in currencies other than their local currencies. These gains and losses are
primarily driven by intercompany transactions. These exposures are included in other expense, net on the
consolidated statements of income.

From time to time, we may elect to use foreign currency forward contracts to reduce the risk from exchange
rate fluctuations on intercompany transactions and projected inventory purchases for our European and Canadian
subsidiaries. In addition, we may elect to enter into foreign currency forward contracts to reduce the risk
associated with foreign currency exchange rate fluctuations on Pound Sterling denominated balance sheet items.
We do not enter into derivative financial instruments for speculative or trading purposes.

Based on the foreign currency forward contracts outstanding as of December 31, 2011, we receive U.S.
Dollars in exchange for Canadian Dollars at a weighted average contractual forward foreign currency exchange
rate of 1.03 CAD per $1.00, U.S. Dollars in exchange for Euros at a weighted average contractual foreign
currency exchange rate of €0.77 per $1.00 and Euros in exchange for Pounds Sterling at a weighted average
contractual foreign currency exchange rate of £0.84 per €1.00. As of December 31, 2011, the notional value of
our outstanding foreign currency forward contracts for our Canadian subsidiary was $51.1 million with contract
maturities of 1 month or less, and the notional value of our outstanding foreign currency forward contracts for
our European subsidiary was $50.0 million with contract maturities of 1 month. As of December 31, 2011, the
notional value of our outstanding foreign currency forward contract used to mitigate the foreign currency
exchange rate fluctuations on Pound Sterling denominated balance sheet items was €10.5 million, or $13.6
million, with a contract maturity of 1 month. The foreign currency forward contracts are not designated as cash
flow hedges, and accordingly, changes in their fair value are recorded in other expense, net on the consolidated
statements of income. The fair values of our foreign currency forward contracts were liabilities of $0.7 million
and $0.6 million as of December 31, 2011 and 2010, respectively, and were included in accrued expenses on the
consolidated balance sheet. Refer to Note 10 to the Consolidated Financial Statements for a discussion of the fair
value measurements. Included in other expense, net were the following amounts related to changes in foreign
currency exchange rates and derivative foreign currency forward contracts:

(In thousands)

Unrealized foreign currency exchange rate gains (losses)
Realized foreign currency exchange rate gains (losses)
Unrealized derivative losses
Realized derivative gains (losses)

Year Ended December 31,

2011

2010

2009

$(4,027)
298
(31)
1,696

$(1,280)
(2,638)
(809)
3,549

$ 5,222
(261)
(1,060)
(4,412)

We enter into foreign currency forward contracts with major financial institutions with investment grade
credit ratings and are 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 foreign currency forward contracts. However,
we monitor the credit quality of these financial institutions and consider the risk of counterparty default to be
minimal. Although we have entered into foreign currency forward contracts to minimize some of the impact of
foreign currency exchange rate fluctuations on future cash flows, we cannot be assured that foreign currency
exchange rate fluctuations will not have a material adverse impact on our financial condition and results of
operations.

Inflation

Inflationary factors such as increases in the cost of our product and overhead costs may adversely affect our
operating results. Although we do not believe that inflation has had a material impact on our financial position or
results of operations to date, a high rate of inflation in the future may have an adverse effect on our ability to
maintain current levels of gross margin and selling, general and administrative expenses as a percentage of net
revenues if the selling prices of our products do not increase with these increased costs.

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). 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 31, 2011.

The effectiveness of our internal control over financial reporting as of December 31, 2011, has been audited

by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report
which appears herein.

/s/ KEVIN A. PLANK

Kevin A. Plank

President, Chief Executive Officer and Chairman of the

Board of Directors

/s/ BRAD DICKERSON

Chief Financial Officer

Brad Dickerson

Dated: February 24, 2012

Report of Independent Registered Public Accounting Firm

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

In our opinion, the consolidated financial statements listed in the index appearing under Item 15(a)(1)
present fairly, in all material respects, the financial position of Under Armour, Inc. and its subsidiaries (the
Company) at December 31, 2011 and 2010, and the results of their operations and their cash flows for each of the
three years in the period ended December 31, 2011 in conformity with accounting principles generally accepted
in the United States of America. In addition, in our opinion, the financial statement schedule listed in the index
appearing under Item 15(a)(2) presents fairly, in all material respects, the information set forth therein when read
in conjunction with the related consolidated financial statements. Also in our opinion, the Company maintained,
in all material respects, effective internal control over financial reporting as of December 31, 2011, based on
criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring
Organizations of the Treadway Commission (COSO). The Company’s management is responsible for these
financial statements and financial statement schedule, 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 Financial Reporting. Our responsibility is to
express opinions on these financial statements, on the financial statement schedule, and on the Company’s
internal control over financial reporting based on our integrated audits. We conducted our audits in accordance
with the standards of the Public Company Accounting Oversight Board (United States). Those standards require
that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are
free of material misstatement and whether effective internal control over financial reporting was maintained in all
material respects. Our audits of the financial statements included examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the accounting principles used and significant
estimates made by management, and evaluating the overall financial statement presentation. 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.

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,
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.

/s/ PricewaterhouseCoopers LLP

Baltimore, Maryland
February 24, 2012

Under Armour, Inc. and Subsidiaries

Consolidated Balance Sheets
(In thousands, except share data)

Assets
Current assets

Cash and cash equivalents
Accounts receivable, net
Inventories
Prepaid expenses and other current assets
Deferred income taxes

Total current assets

Property and equipment, net
Intangible assets, net
Deferred income taxes
Other long term assets

Total assets

Liabilities and Stockholders’ Equity
Current liabilities

Accounts payable
Accrued expenses
Current maturities of long term debt
Other current liabilities

Total current liabilities

Long term debt, net of current maturities
Other long term liabilities

Total liabilities

Commitments and contingencies (see Note 8)

Stockholders’ equity

Class A Common Stock, $.0003 1/3 par value; 100,000,000 shares authorized as
of December 31, 2011 and 2010; 40,496,126 shares issued and outstanding as
of December 31, 2011 and 38,660,355 shares issued and outstanding as of
December 31, 2010.

Class B Convertible Common Stock, $.0003 1/3 par value; 11,250,000 shares
authorized, issued and outstanding as of December 31, 2011, 12,500,000
shares authorized, issued and outstanding as of December 31, 2010.

Additional paid-in capital
Retained earnings
Accumulated other comprehensive income

Total stockholders’ equity

December 31,
2011

December 31,
2010

$175,384
134,043
324,409
39,643
16,184

689,663
159,135
5,535
15,885
48,992

$203,870
102,034
215,355
19,326
15,265

555,850
76,127
3,914
21,275
18,212

$919,210

$675,378

$100,527
69,285
6,882
6,913

183,607
70,842
28,329

282,778

$ 84,679
55,138
6,865
2,465

149,147
9,077
20,188

178,412

4
268,223
366,164
2,028

636,432

4
224,887
270,021
2,041

496,966

Total liabilities and stockholders’ equity

$919,210

$675,378

See accompanying notes.

Under Armour, Inc. and Subsidiaries

Consolidated Statements of Income
(In thousands, except per share amounts)

Net revenues
Cost of goods sold

Gross profit

Selling, general and administrative expenses

Income from operations

Interest expense, net
Other expense, net

Income before income taxes

Provision for income taxes

Net income

Net income available per common share
Basic
Diluted

Weighted average common shares outstanding
Basic
Diluted

Year Ended December 31,
2010

2011

2009

$1,472,684
759,848

$1,063,927
533,420

$856,411
446,286

712,836
550,069

162,767
(3,841)
(2,064)

156,862
59,943

96,919

1.88
1.85

$
$

530,507
418,152

112,355
(2,258)
(1,178)

108,919
40,442

410,125
324,852

85,273
(2,344)
(511)

82,418
35,633

68,477

$ 46,785

1.35
1.34

$
$

0.94
0.92

51,570
52,526

50,798
51,282

49,848
50,650

See accompanying notes.

Under Armour, Inc. and Subsidiaries

Consolidated Statements of Stockholders’ Equity and Comprehensive Income
(In thousands)

Class A
Common Stock

Class B
Convertible
Common Stock

Shares Amount Shares Amount

Additional
Paid-In
Capital

Retained
Earnings

Unearned
Compen-
sation

Accum-
ulated
Other
Compre-
hensive
Income
(Loss)

Compre-
hensive
Income

Total
Stockholders’
Equity

Balance as of December 31, 2008 36,809
Exercise of stock options
853
Shares withheld in consideration of

$ 12
1

12,500
—

4
—

$174,725 $156,011
—

4,000

$ (60)
—

$ 405
—

$331,097
4,001

(26) —

112 —
—

employee tax obligations
relative to stock-based
compensation arrangements
Issuance of Class A Common
Stock, net of forfeitures

Stock-based compensation expense —
Net excess tax benefits from stock-

based compensation
arrangements

Comprehensive income :

Net income
Foreign currency translation
adjustment, net of tax of
$101

Comprehensive income

—

—
—

—

—
—

—

(608) —

1,509
12,864

4,244

—
—

—

46,785

—

—
46

—

Balance as of December 31, 2009 37,748
Exercise of stock options
Shares withheld in consideration of

13
799 —

12,500
—

4
—

197,342
6,104

202,188
—

(14)
—

Balance as of December 31, 2010 38,660
Exercise of stock options
Shares withheld in consideration of

13
563 —

12,500
—

4
—

224,887
12,853

270,021
—

(19) —

132 —
—

employee tax obligations
relative to stock-based
compensation arrangements
Issuance of Class A Common
Stock, net of forfeitures

Stock-based compensation expense —
Net excess tax benefits from stock-

based compensation
arrangements

Comprehensive income :

Net income
Foreign currency translation

adjustment

Comprehensive income

—

—
—

—

—
—

—

employee tax obligations
relative to stock-based
compensation arrangements
Issuance of Class A Common
Stock, net of forfeitures
Class B Convertible Common
Stock converted to Class A
Common Stock

(12) —

35 —

—

1,250 — (1,250) —
—

—

Stock-based compensation expense —
Net excess tax benefits from stock-

based compensation
arrangements

Comprehensive income :

Net income
Foreign currency translation

adjustment

Comprehensive income

—

(644) —

1,788
16,170

3,483

—

—
—

—

68,477

—

—
14

—

—
—

—

(776) —

2,041

—
18,063

10,379

—

—
—

—

96,919

—

—
—

—

—
—

—

(608)

1,509
12,910

4,244

— $46,785

46,785

464
—

—

—
—

—

1,577

2,041
—

—

—
—

—

46,844

399,997
6,104

(644)

1,788
16,184

3,483

68,477

1,577

70,054

1,577

496,966
12,853

(776)

2,041

—
18,063

10,379

96,919

(13)

$96,906

Balance as of December 31, 2011 40,496

$ 13

11,250

$268,223 $366,164

$—

$2,028

$636,432

See accompanying notes.

Under Armour, Inc. and Subsidiaries

Consolidated Statements of Cash Flows
(In thousands)

Cash flows from operating activities
Net income
Adjustments to reconcile net income to net cash provided by operating activities

Depreciation and amortization
Unrealized foreign currency exchange rate (gains) losses
Loss on disposal of property and equipment
Stock-based compensation
Gain on bargain purchase of corporate headquarters (excludes transaction

costs of $1.9 million)

Deferred income taxes
Changes in reserves and allowances
Changes in operating assets and liabilities:

Accounts receivable
Inventories
Prepaid expenses and other assets
Accounts payable
Accrued expenses and other liabilities
Income taxes payable and receivable

Year Ended December 31,

2011

2010

2009

$ 96,919

$ 68,477

$ 46,785

36,301
4,027
36
18,063

(3,300)
3,620
5,536

(33,923)
(114,646)
(42,633)
17,209
23,442
4,567

31,321
1,280
44
16,227

—
(10,337)
2,322

(32,320)
(65,239)
(4,099)
16,158
21,330
4,950

28,249
(5,222)
37
12,910

—
(5,212)
1,623

3,792
32,998
1,870
(4,386)
11,656
(6,059)

Net cash provided by operating activities

15,218

50,114

119,041

Cash flows from investing activities
Purchase of property and equipment
Purchase of corporate headquarters and related expenditures
Purchase of long term investment
Purchases of other assets
Change in restricted cash

Net cash used in investing activities

Cash flows from financing activities
Proceeds from revolving credit facility
Payments on revolving credit facility
Proceeds from term loan
Proceeds from long term debt
Payments on long term debt
Payments on capital lease obligations
Excess tax benefits from stock-based compensation arrangements
Proceeds from exercise of stock options and other stock issuances
Payments of debt financing costs

Net cash provided by (used in) financing activities

Effect of exchange rate changes on cash and cash equivalents

(56,228)
(23,164)
(3,862)
(1,153)
(5,029)

(30,182)
—
(11,125)
(478)
—

(19,845)
—
—
(35)
—

(89,436)

(41,785)

(19,880)

30,000
(30,000)
25,000
5,644
(7,418)
—
10,260
14,645
(2,324)

45,807
(75)

—
—
—
5,262
(9,446)
(97)
4,189
7,335
—

7,243
1,001

—
(25,000)
—
7,649
(7,656)
(361)
5,127
5,128
(1,354)

(16,467)
2,561

Net increase (decrease) in cash and cash equivalents

(28,486)

16,573

85,255

Cash and cash equivalents
Beginning of year
End of year

Non-cash financing and investing activities
Debt assumed in connection with purchase of corporate headquarters

Other supplemental information
Cash paid for income taxes
Cash paid for interest

203,870
$ 175,384

187,297
$203,870

102,042
$187,297

$ 38,556

$ — $ —

56,940
2,305

38,773
992

40,834
1,273

See accompanying notes.

Under Armour, Inc. and Subsidiaries

Notes to the Audited Consolidated Financial Statements

1. Description of the Business

Under Armour, Inc. is a developer, marketer and distributor of branded performance apparel, footwear and
accessories. These products are sold worldwide and worn by athletes at all levels, from youth to professional on
playing fields around the globe, as well as by consumers with active lifestyles.

2. Summary of Significant Accounting Policies

Basis of Presentation

The accompanying consolidated financial statements include the accounts of Under Armour, Inc. and its
wholly owned subsidiaries (the “Company”). All intercompany balances and transactions have been eliminated.
The accompanying consolidated financial statements were prepared in accordance with accounting principles
generally accepted in the United States of America.

Cash and Cash Equivalents

The Company considers all highly liquid investments with an original maturity of three months or less at

date of inception to be cash and cash equivalents. Included in interest expense, net for the years ended
December 31, 2011, 2010 and 2009 was interest income of $30.0 thousand, $48.7 thousand and $102.8 thousand,
respectively, related to cash and cash equivalents.

Concentration of Credit Risk

Financial instruments that subject the Company to significant concentration of credit risk consist primarily

of accounts receivable. The majority of the Company’s accounts receivable is due from large sporting goods
retailers. Credit is extended based on an evaluation of the customer’s financial condition and collateral is not
required. The most significant customers that accounted for a large portion of net revenues and accounts
receivable are as follows:

Net revenues
2011
2010
2009

Accounts receivable

2011
2010
2009

Customer
A

Customer
B

Customer
C

18.2%
18.5%
19.4%

25.4%
23.3%
17.6%

7.4%
8.7%
9.4%

8.6%
11.0%
10.7%

5.6%
5.0%
4.6%

5.5%
5.4%
6.0%

Allowance for Doubtful Accounts

The Company makes ongoing estimates relating to the collectability of accounts receivable and maintains an

allowance for estimated losses resulting from the inability of its customers to make required payments. In
determining the amount of the reserve, the Company considers historical levels of credit losses and significant
economic developments within the retail environment that could impact the ability of its customers to pay
outstanding balances and makes judgments about the creditworthiness of significant customers based on ongoing
credit evaluations. Because the Company cannot predict future changes in the financial stability of its 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

the Company determines a smaller or larger reserve is appropriate, it would record a benefit or charge to selling,
general and administrative expense in the period in which such a determination was made. As of December 31,
2011 and 2010, the allowance for doubtful accounts was $4.1 million and $4.9 million, respectively.

Inventories

Inventories consist of finished goods, raw materials and work-in-process. Costs of finished goods

inventories include all costs incurred to bring inventory to its current condition, including inbound freight, duties
and other costs. The Company values its inventory at standard cost which approximates landed cost, using the
first-in, first-out method of cost determination. Market value is estimated based upon assumptions made about
future demand and retail market conditions. If the Company determines that the estimated market value of its
inventory is less than the carrying value of such inventory, it records a charge to cost of goods sold to reflect the
lower of cost or market. If actual market conditions are less favorable than those projected by the Company,
further adjustments may be required that would increase the cost of goods sold in the period in which such a
determination was made.

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 the
Company’s 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.

Assessing whether deferred tax assets are realizable requires significant judgment. The Company considers

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 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.

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. The Company recognizes accrued interest and penalties
related to unrecognized tax benefits in the provision for income taxes on the consolidated statements of income.

Property and Equipment

Property and equipment are stated at cost, including the cost of internal labor for software customized for
internal use, less accumulated depreciation and amortization. Property and equipment is depreciated using the
straight-line method over the estimated useful lives of the assets: 3 to 5 years for furniture, office equipment,
software and plant equipment and 10 to 35 years for site improvements, buildings and building equipment.
Leasehold and tenant improvements are amortized over the shorter of the lease term or the estimated useful lives
of the assets. The cost of in-store apparel and footwear fixtures and displays are capitalized, included in furniture,
fixtures and displays, and depreciated over 3 years.

The Company capitalizes the cost of interest for long term property and equipment projects based on the
Company’s weighted average borrowing rates in place while the projects are in progress. Capitalized interest was
$0.7 million as of December 31, 2011 and 2010.

Upon retirement or disposition of property and equipment, the cost and accumulated depreciation are
removed from the accounts and any resulting gain or loss is reflected in selling, general and administrative
expenses for that period. Major additions and betterments are capitalized to the asset accounts while maintenance
and repairs, which do not improve or extend the lives of assets, are expensed as incurred.

Impairment of Long-Lived Assets

The Company continually evaluates 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, the Company reviews 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. No material impairments were
recorded during the years ended December 31, 2011, 2010 and 2009.

Accrued Expenses

At December 31, 2011, accrued expenses primarily included $31.4 million and $14.2 million of accrued

compensation and benefits and marketing expenses, respectively. At December 31, 2010, accrued expenses
primarily included $31.0 million and $7.8 million of accrued compensation and benefits and marketing expenses,
respectively.

Foreign Currency Translation and Transactions

The functional currency for each of the Company’s wholly owned foreign subsidiaries is generally the
applicable local currency. The translation of foreign currencies into U.S. dollars is performed for assets and
liabilities using current foreign currency exchange rates in effect at the balance sheet date and for revenue and
expense accounts using average foreign currency exchange rates during the period. Capital accounts are
translated at historical foreign currency exchange rates. Translation gains and losses are included in stockholders’
equity as a component of accumulated other comprehensive income. Adjustments that arise from foreign
currency exchange rate changes on transactions, primarily driven by intercompany transactions, denominated in a
currency other than the functional currency are included in other expense, net on the consolidated statements of
income.

Derivatives

The Company uses derivative financial instruments in the form of foreign currency forward contracts to

minimize the risk associated with foreign currency exchange rate fluctuations. The Company accounts for
derivative financial instruments pursuant to applicable accounting guidance. This guidance establishes
accounting and reporting standards for derivative financial instruments and requires all derivatives to be
recognized as either assets or liabilities on the balance sheet and to be measured at fair value. Unrealized
derivative gain positions are recorded as other current assets or other long term assets, and unrealized derivative
loss positions are recorded as accrued expenses or other long term liabilities, depending on the derivative
financial instrument’s maturity date.

Currently, the Company’s foreign currency forward contracts are not designated as cash flow hedges, and

accordingly, changes in their fair value are included in other expense, net on the consolidated statements of
income. The Company does not enter into derivative financial instruments for speculative or trading purposes.

Revenue Recognition

The Company recognizes revenue pursuant to applicable accounting standards. Net revenues consist of both
net sales and license revenues. Net sales are recognized upon transfer of ownership, including passage of title to
the customer and transfer of risk of loss related to those goods. Transfer of title and risk of loss is based upon
shipment under free on board shipping point for most goods or upon receipt by the customer depending on the
country of the sale and the agreement with the customer. In some instances, transfer of title and risk of loss takes
place at the point of sale, for example, at the Company’s retail stores. The Company may also ship product

directly from its supplier to the customer and recognize revenue when the product is delivered to and accepted by
the customer. License revenues are recognized based upon shipment of licensed products sold by the Company’s
licensees. Sales taxes imposed on the Company’s revenues from product sales are presented on a net basis on the
consolidated statements of income and therefore do not impact net revenues or costs of goods sold.

The Company records reductions to revenue for estimated customer returns, allowances, markdowns and

discounts. The Company bases its 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 the
Company. The actual amount of customer returns and allowances, which is inherently uncertain, may differ from
the Company’s estimates. If the Company determines that actual or expected returns or allowances are
significantly higher or lower than the reserves it established, it would record a reduction or increase, as
appropriate, to net sales in the period in which it makes 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 recorded as an offset to accounts receivable as settlements are made through
offsets to outstanding customer invoices. As of December 31, 2011 and 2010, there were $27.1 million and $25.2
million, respectively, in reserves for customer returns, allowances, markdowns and discounts.

Advertising Costs

Advertising costs are charged to selling, general and administrative expenses. Advertising production costs
are expensed the first time an advertisement related to such production costs is run. Media (television, print and
radio) placement costs are expensed in the month during which the advertisement appears, and costs related to
event sponsorships are expensed when the event occurs. In addition, advertising costs include sponsorship
expenses. Accounting for sponsorship payments is based upon specific contract provisions and the payments are
generally expensed uniformly over the term of the contract after recording expense related to specific
performance incentives once they are deemed probable. Advertising expense, including amortization of in-store
marketing fixtures and displays, was $167.9 million, $128.2 million and $108.9 million for the years ended
December 31, 2011, 2010 and 2009, respectively. At December 31, 2011 and 2010, prepaid advertising costs
were $10.4 million and $3.2 million, respectively.

Shipping and Handling Costs

The Company charges certain customers shipping and handling fees. These fees are recorded in net

revenues. The Company includes the majority of outbound handling costs as a component of selling, general and
administrative expenses. Outbound handling costs include costs associated with preparing goods to ship to
customers and certain costs to operate the Company’s distribution facilities. These costs, included within selling,
general and administrative expenses, were $26.1 million, $14.7 million and $12.2 million for the years ended
December 31, 2011, 2010 and 2009, respectively. The Company includes outbound freight costs associated with
shipping goods to customers as a component of cost of goods sold.

Minority Investment

Beginning in January 2011, the Company has held a minority equity investment in Dome Corporation
(“Dome”), the Company’s Japanese licensee. The Company invested ¥1,140.0 million, or $15.5 million, in
exchange for 19.5% common stock ownership in Dome. As of December 31, 2011, the carrying value of the
Company’s investment was $14.4 million, and was included in other long term assets on the consolidated balance
sheet. The investment is subject to foreign currency translation rate fluctuations as it is held by the Company’s
European subsidiary.

The Company accounts for its investment in Dome under the cost method given that it does not have the

ability to exercise significant influence. Additionally, the Company concluded that no event or change in
circumstances occurred during the period that may have a significant adverse effect on the fair value of the
investment.

Earnings per Share

Basic earnings per common share is computed by dividing net income available to common stockholders for

the period by the weighted average number of common shares outstanding during the period. Any stock-based
compensation awards that are determined to be participating securities, which are stock-based compensation
awards that entitle the holders to receive dividends prior to vesting, are included in the calculation of basic
earnings per share using the two class method. Diluted earnings per common share is computed by dividing net
income available to common stockholders for the period by the diluted weighted average common shares
outstanding during the period. Diluted earnings per share reflects the potential dilution from common shares
issuable through stock options, warrants, restricted stock units and other equity awards. Refer to Note 12 for
further discussion of earnings per share.

Stock-Based Compensation

The Company accounts 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. In addition, this guidance requires that excess tax benefits
related to stock-based compensation awards be reflected as financing cash flows.

The Company uses the Black-Scholes option-pricing model to estimate the fair market value of stock-based

compensation awards. As the Company does not have sufficient historical exercise data to provide a reasonable
basis upon which to estimate the expected life due to the limited period of time its shares of Class A Common
Stock have been publicly traded, it uses the “simplified method” as permitted by accounting guidance. The
“simplified method” calculates the expected life of a stock option equal to the time from grant to the midpoint
between the vesting date and contractual term, taking into account all vesting tranches. The risk free interest rate
is based on the yield for the U.S. Treasury bill with a maturity equal to the expected life of the stock option.
Expected volatility is based on an average for a peer group of companies similar in terms of type of business,
industry, stage of life cycle and size. Compensation expense is recognized net of forfeitures on a straight-line
basis over the total vesting period, which is the implied requisite service period. Compensation expense for
performance-based awards is recorded over the implied requisite service period when achievement of the
performance target is deemed probable. The forfeiture rate is estimated at the date of grant based on historical
rates.

In addition, the Company recognized expense for stock-based compensation awards granted prior to the
Company’s initial filing of its S-1 Registration Statement in accordance with accounting guidance that allows the
intrinsic value method. Under the intrinsic value method, stock-based compensation expense of fixed stock
options is based on the difference, if any, between the fair value of the company’s stock on the grant date and the
exercise price of the option. The stock-based compensation expense for these awards was fully amortized in
2010. Had the Company elected to account for all stock-based compensation awards at fair value, the impact to
net income and earnings per share for the years ended December 31, 2010 and 2009 would not have been
material to its consolidated financial position or results of operations.

The Company issues new shares of Class A Common Stock upon exercise of stock options, grant of

restricted stock or share unit conversion. Refer to Note 13 for further details on stock-based compensation.

Management Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the

United States of America requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated
financial statements and the reported amounts of revenues and expenses during the reporting period. Actual
results could differ from these estimates.

Fair Value of Financial Instruments

The carrying amounts shown for the Company’s cash and cash equivalents, accounts receivable and
accounts payable approximate fair value because of the short term maturity of those instruments. The fair value
of the long term debt approximates its carrying value based on the variable nature of interest rates and current
market rates available to the Company. The fair value of foreign currency forward contracts is based on the net
difference between the U.S. dollars to be received or paid at the contracts’ settlement date and the U.S. dollar
value of the foreign currency to be sold or purchased at the current forward exchange rate.

Recently Issued Accounting Standards

In June 2011, the Financial Accounting Standards Board (“FASB”) issued an Accounting Standards Update

which eliminates the option to report other comprehensive income and its components in the statement of
changes in stockholders’ equity. It requires an entity to present total comprehensive income, which includes the
components of net income and the components of other comprehensive income, either in a single continuous
statement or in two separate but consecutive statements. In December 2011, the FASB issued an amendment to
this pronouncement which defers the specific requirement to present components of reclassifications of other
comprehensive income on the face of the income statement. These pronouncements are effective for financial
statements issued for fiscal years, and interim periods within those years, beginning after December 15, 2011.
The Company believes the adoption of these pronouncements will not have a material impact on its consolidated
financial statements.

In May 2011, the FASB issued an Accounting Standards Update which clarifies requirements for how to

measure fair value and for disclosing information about fair value measurements common to accounting
principles generally accepted in the United States of America and International Financial Reporting Standards.
This guidance is effective for interim and annual periods beginning on or after December 15, 2011. The
Company believes the adoption of this guidance will not have a material impact on its consolidated financial
statements.

3. Inventories

Inventories consisted of the following:

(In thousands)

Finished goods
Raw materials

Total inventories

4. Acquisitions

December 31,

2011

2010

$323,606
803

$214,524
831

$324,409

$215,355

In July 2011, the Company acquired approximately 400.0 thousand square feet of office space comprising
its corporate headquarters for $60.5 million. The acquisition included land, buildings, tenant improvements and
third party lease-related intangible assets. As of the purchase date, 163.6 thousand square feet of the
400.0 thousand square feet acquired was leased to third party tenants. These leases had remaining lease terms
ranging from 9 months to 15 years on the purchase date. The Company intends to occupy additional space as it
becomes available. Since the acquisition, the Company has invested $2.2 million in additional improvements.

The acquisition included the assumption of a $38.6 million loan secured by the property and the remaining

a discussion of the assumed loan and term loan. A $1.0 million deposit was paid upon signing the purchase
agreement in November 2010.

The aggregate fair value of the acquisition was $63.8 million. The fair value was estimated using a

combination of market, income and cost approaches. The acquisition was accounted for as a business
combination, and as such the Company recognized a bargain purchase gain of $3.3 million as the amount by
which the fair value of the net assets acquired exceeded the fair value of the purchase price.

In connection with this acquisition, the Company incurred acquisition related expenses of approximately
$1.9 million. Both the acquisition related expenses and pre-tax bargain purchase gain were included in selling,
general and administrative expenses on the consolidated statements of income during the year ended
December 31, 2011. This transaction is not expected to have a material impact to the Company’s consolidated
statements of income in future periods.

The Company believes that it was able to negotiate the acquisition of the net assets for less than fair value

because the seller marketed the property in a limited manner, and thus the property did not have adequate
exposure to the market prior to the measurement date to allow for marketing activities that are usual and
customary for real estate transactions. In addition, the Company was the majority tenant immediately prior to the
acquisition and was willing and qualified to assume the secured loan.

5. Property and Equipment, Net

Property and equipment consisted of the following:

(In thousands)

Leasehold and tenant improvements
Furniture, fixtures and displays
Buildings
Software
Office equipment
Plant equipment
Land
Construction in progress
Other

Subtotal property and equipment

Accumulated depreciation

Property and equipment, net

December 31,

2011

2010

$ 60,217
49,445
42,141
36,796
30,427
27,026
17,628
9,160
970

$ 38,739
41,907
—
30,579
21,271
21,653
—
7,223
1,534

273,810
(114,675)

162,906
(86,779)

$ 159,135

$ 76,127

Construction in progress primarily includes costs incurred for software systems, leasehold improvements

and in-store fixtures and displays not yet placed in use.

Depreciation expense related to property and equipment was $32.7 million, $28.7 million and $25.3 million

for the years ended December 31, 2011, 2010 and 2009, respectively.

6. Intangible Assets, Net

The following table summarizes the Company’s intangible assets as of the periods indicated:

December 31, 2011

December 31, 2010

Gross
Carrying
Amount

Accumulated
Amortization

Net Carrying
Amount

Gross
Carrying
Amount

Accumulated
Amortization

Net Carrying
Amount

(In thousands)

Intangible assets subject to

amortization:

Footwear promotional rights
Lease-related intangible assets
Other

Total

$ 8,500
3,896
2,982

$ (8,125)
(743)
(1,576)

$15,378

$(10,444)

Indefinite-lived intangible assets

Intangible assets, net

$ 8,500
—
2,982

$(6,625)
—
(943)

$11,482

$(7,568)

$ 375
3,153
1,406

$4,934

601

$5,535

$1,875
—
2,039

$3,914

—

$3,914

Intangible assets, excluding lease-related intangible assets, are amortized using estimated useful lives of 55
months to 89 months with no residual value. Lease-related intangible assets were acquired with the purchase of
the Company’s corporate headquarters and are amortized over the remaining third party lease terms, which
ranged from 9 months to 15 years on the date of purchase. Amortization expense, which is included in selling,
general and administrative expenses, was $2.9 million, $2.0 million and $1.9 million for the years ended
December 31, 2011, 2010 and 2009, respectively. The estimated amortization expense of the Company’s
intangible assets is $2.2 million and $0.9 million for the years ending December 31, 2012 and 2013, respectively,
and $0.3 million for each of the years ending December 31, 2014, 2015 and 2016.

7. Credit Facility and Long Term Debt

Credit Facility

In March 2011, the Company entered into a new $325.0 million credit facility with certain lending
institutions and terminated its prior $200.0 million revolving credit facility in order to increase the Company’s
available financing and to expand its lending syndicate. The credit facility has a term of four years and provides
for a committed revolving credit line of up to $300.0 million, in addition to a $25.0 million term loan facility.
The commitment amount under the revolving credit facility may be increased by an additional $50.0 million,
subject to certain conditions and approvals as set forth in the credit agreement. The Company incurred and
capitalized $1.6 million in deferred financing costs in connection with the credit facility.

The credit facility may be used for working capital and general corporate purposes and is collateralized by
substantially all of the assets of the Company and certain of its domestic subsidiaries (other than trademarks and
the land, buildings and other assets comprising the Company’s corporate headquarters) and by a pledge of 65%
of the equity interests of certain of the Company’s foreign subsidiaries. Up to $5.0 million of the facility may be
used to support letters of credit, of which none were outstanding as of December 31, 2011. The Company is
required to maintain a certain leverage ratio and interest coverage ratio as set forth in the credit agreement. As of
December 31, 2011, the Company was in compliance with these ratios. The credit agreement also provides the
lenders with the ability to reduce the borrowing base, even if the Company is in compliance with all conditions of
the credit agreement, upon a material adverse change to the business, properties, assets, financial condition or
results of operations of the Company. The credit agreement contains a number of restrictions that limit the
Company’s ability, among other things, and subject to certain limited exceptions, to incur additional
indebtedness, pledge its assets as security, guaranty obligations of third parties, make investments, undergo a
merger or consolidation, dispose of assets, or materially change its line of business. In addition, the credit
agreement includes a cross default provision whereby an event of default under other debt obligations, as defined
in the credit agreement, will be considered an event of default under the credit agreement.

Borrowings under the credit facility bear interest based on the daily balance outstanding at LIBOR (with no

rate floor) plus an applicable margin (varying from 1.25% to 1.75%) or, in certain cases a base rate (based on a
certain lending institution’s Prime Rate or as otherwise specified in the credit agreement, with no rate floor) plus an
applicable margin (varying from 0.25% to 0.75%). The credit facility also carries a commitment fee equal to the
unused borrowings multiplied by an applicable margin (varying from 0.25% to 0.35%). The applicable margins are
calculated quarterly and vary based on the Company’s leverage ratio as set forth in the credit agreement.

Upon entering into the credit facility in March 2011, the Company terminated its prior $200.0 million

revolving credit facility. The prior revolving credit facility was collateralized by substantially all of the
Company’s assets, other than trademarks, and included covenants, conditions and other terms similar to the
Company’s new credit facility.

In May 2011, the Company borrowed $25.0 million under the term loan facility to finance a portion of the

acquisition of the Company’s corporate headquarters. The interest rate on the term loan was 1.5% during the year
ended December 31, 2011. The maturity date of the term loan is March 2015, which is the end of the credit
facility term. The Company expects to refinance the term loan in early 2013 with the loan assumed in the
acquisition of the Company’s corporate headquarters. During the three months ended September 30, 2011, the
Company borrowed $30.0 million under the revolving credit facility to fund seasonal working capital
requirements and repaid it during the three months ended December 31, 2011. The interest rate under the
revolving credit facility was 1.5% during the year ended December 31, 2011, and no balance was outstanding as
of December 31, 2011. No balances were outstanding under the prior revolving credit facility during the year
ended December 31, 2010.

Long Term Debt

The Company has long term debt agreements with various lenders to finance the acquisition or lease of
qualifying capital investments. Loans under these agreements are collateralized by a first lien on the related
assets acquired. As these agreements are not committed facilities, each advance is subject to approval by the
lenders. Additionally, these agreements include a cross default provision whereby an event of default under other
debt obligations, including the Company’s credit facility, will be considered an event of default under these
agreements. These agreements require a prepayment fee if the Company pays outstanding amounts ahead of the
scheduled terms. The terms of the credit facility limit the total amount of additional financing under these
agreements to $40.0 million, of which $21.5 million was available for additional financing as of December 31,
2011. At December 31, 2011 and 2010, the outstanding principal balance under these agreements was $14.5
million and $15.9 million, respectively. Currently, advances under these agreements bear interest rates which are
fixed at the time of each advance. The weighted average interest rates on outstanding borrowings were 3.5%,
5.3% and 5.9% for the years ended December 31, 2011, 2010 and 2009, respectively.

The following are the scheduled maturities of long term debt as of December 31, 2011:

(In thousands)

2012
2013 (1)
2014
2015
2016

Total scheduled maturities of long term debt

Less current maturities of long term debt

Long term debt obligations

$ 6,882
65,919
2,972
1,951
—

77,724
(6,882)

$70,842

(1)

Includes the repayment of $25.0 million borrowed under the term loan facility, which is due in
March 2015, but is planned to be refinanced in early 2013 with the loan assumed in the acquisition
of the Company’s corporate headquarters.

The Company monitors the financial health and stability of its lenders under the revolving credit and 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.

In July 2011, in connection with the Company’s acquisition of its corporate headquarters, the Company
assumed a $38.6 million nonrecourse loan secured by a mortgage on the acquired property. The acquisition of the
Company’s corporate headquarters was accounted for as a business combination, and the carrying value of the
loan secured by the acquired property approximates fair value. The assumed loan had an original term of
approximately ten years with a scheduled maturity date of March 1, 2013. The loan includes a balloon payment
of $37.3 million due at maturity, and may not be prepaid. The assumed loan is nonrecourse with the lender’s
remedies for non-performance limited to action against the acquired property and certain required reserves and a
cash collateral account, except for nonrecourse carve outs related to fraud, breaches of certain representations,
warranties or covenants, including those related to environmental matters, and other standard carve outs for a
loan of this type. The loan requires certain minimum cash flows and financial results from the property, and if
those requirements are not met, additional reserves may be required. The assumed loan requires prior approval of
the lender for certain matters related to the property, including material leases, changes to property management,
transfers of any part of the property and material alterations to the property. The loan has an interest rate of
6.73%. In connection with the assumed loan, the Company incurred and capitalized $0.8 million in deferred
financing costs. As of December 31, 2011, the outstanding balance on the loan was $38.2 million. In addition, in
connection with the assumed loan for the acquisition of its corporate headquarters, the Company was required to
set aside amounts in reserve and cash collateral accounts. As of December 31, 2011, $2.0 million of restricted
cash was included in prepaid expenses and other current assets, and the remaining $3.0 million of restricted cash
was included in other long term assets.

Interest expense was $3.9 million, $2.3 million and $2.4 million for the years ended December 31, 2011,

2010 and 2009, respectively. Interest expense includes the amortization of deferred financing costs and interest
expense under the credit and long term debt facilities, as well as the assumed loan discussed above.

8. Commitments and Contingencies

Obligations Under Operating Leases

The Company leases warehouse space, office facilities, space for its retail stores and certain equipment
under non-cancelable operating leases. The leases expire at various dates through 2023, excluding extensions at
the Company’s option, and include provisions for rental adjustments. The table below includes executed lease
agreements for factory house stores that the Company did not yet occupy as of December 31, 2011 and does not
include contingent rent the company may incur at its retail stores based on future sales above a specified limit.
The following is a schedule of future minimum lease payments for non-cancelable real property operating leases
as of December 31, 2011:

(In thousands)

2012
2013
2014
2015
2016
2017 and thereafter

Total future minimum lease payments

Operating

$ 22,926
23,470
26,041
24,963
18,734
69,044

$185,178

Included in selling, general and administrative expense was rent expense of $26.7 million, $21.3 million and

$14.1 million for the years ended December 31, 2011, 2010 and 2009, respectively, under non-cancelable

operating lease agreements. Included in these amounts was contingent rent expense of $3.6 million, $2.0 million
and $0.6 million for the years ended December 31, 2011, 2010 and 2009, respectively. The operating lease
obligations included above do not include any contingent rent.

Sponsorships and Other Marketing 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 31, 2011:

(In thousands)

2012
2013
2014
2015
2016
2017 and thereafter

Total future minimum sponsorship and other marketing payments

$ 52,855
46,910
42,514
22,689
3,580
966

$169,514

The amounts listed above are the minimum obligations 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 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

The Company is, from time to time, involved in routine legal matters incidental to its business. The
Company believes that the ultimate resolution of any such current proceedings and claims will not have a
material adverse effect on its consolidated financial position, results of operations or cash flows.

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.

9. Stockholders’ Equity

The Company’s Class A Common Stock and Class B Convertible Common Stock have an authorized

number of shares of 100.0 million shares and 11.3 million shares, respectively, and each have a par value of
$0.0003 1/3 per share. 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 one 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 founder and Chief Executive Officer (“CEO”), or a related party of Mr. Plank, as defined in the
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 next record date for the
stockholders’ meeting following the date 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. Holders of the 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.

During the year ended December 31, 2011, 1.2 million shares of Class B Convertible Common Stock were

converted into shares of Class A Common Stock on a one-for-one basis in connection with stock sales.

10. Fair Value Measurements

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an

orderly transaction between market participants at the measurement date (an exit price). 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:

Level 1:

Observable inputs such as quoted prices in active markets;

Level 2:

Level 3:

Inputs, other than quoted prices in active markets, that are observable either directly or
indirectly; and

Unobservable inputs for which there is little or no market data, which require the reporting
entity to develop its own assumptions.

Financial assets and (liabilities) measured at fair value as of December 31, 2011 are set forth in the table

below:

(In thousands)

Level 1

Level 2

Level 3

Derivative foreign currency forward contracts (see Note 15)
TOLI policies held by the Rabbi Trust (see Note 14)
Deferred Compensation Plan obligations (see Note 14)

$—
—
—

$—
$ (659)
3,943
—
(3,485) —

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 foreign currency forward contracts represent 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’ settlement date and the U.S. dollar value of the foreign currency to be sold or purchased at the
current forward exchange rate. The fair value of the trust owned life insurance (“TOLI”) policies held by the
Rabbi Trust is 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 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 Compensation 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’ selected investments.

11. Provision for Income Taxes

Income (loss) before income taxes is as follows:

(In thousands)

Income (loss) before income taxes:

United States
Foreign

Total

Year Ended December 31,

2011

2010

2009

$122,774
34,088

$ 96,179
12,740

$86,752
(4,334)

$156,862

$108,919

$82,418

The components of the provision for income taxes consisted of the following:

(In thousands)

Current
Federal
State
Other foreign countries

Deferred
Federal
State
Other foreign countries

Provision for income taxes

Year Ended December 31,

2011

2010

2009

$38,209
10,823
7,291

$ 39,139
8,020
3,620

$32,215
7,285
1,345

56,323

50,779

40,845

5,604
548
(2,532)

(6,617)
(3,487)
(233)

3,620

(10,337)

(2,421)
244
(3,035)

(5,212)

$59,943

$ 40,442

$35,633

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

follows:

U.S. federal statutory income tax rate
State taxes, net of federal tax impact
Unrecognized tax benefits
Nondeductible expenses
Foreign rate differential
Other

Effective income tax rate

Year Ended December 31,

2011

35.0%
4.1
3.1
0.8
(4.8)
—

38.2%

2010

35.0%
1.2
2.3
1.4
(1.6)
(1.2)

37.1%

2009

35.0%
5.7
1.1
2.2
(0.7)
(0.1)

43.2%

The increase in the 2011 full year effective income tax rate, as compared to 2010, is primarily attributable to

federal and state tax credits that reduced the effective tax rate in 2010, partially offset by the 2011 reversal of a
valuation allowance established in 2010 against a portion of the Company’s deferred tax assets related to foreign
net operating loss carryforwards.

Deferred tax assets and liabilities consisted of the following:

(In thousands)

Deferred tax asset
Stock-based compensation
Foreign net operating loss carryforward
Allowance for doubtful accounts and other reserves
Deferred rent
Tax basis inventory adjustment
Inventory obsolescence reserves
Foreign tax credits
Deferred compensation
State tax credits, net of federal tax impact
Other

Total deferred tax assets
Less: valuation allowance

Total net deferred tax assets

Deferred tax liability
Intangible asset
Prepaid expenses
Property, plant and equipment

Total deferred tax liabilities

Total deferred tax assets, net

December 31,

2011

2010

$ 11,238
11,078
9,576
4,611
4,317
3,789
1,784
1,448
—
3,427

$ 8,790
10,917
8,996
2,975
3,052
2,264
—
1,449
1,750
2,709

51,268
(1,784)

42,902
(1,765)

49,484

41,137

(341)
(2,968)
(13,748)

(17,057)

372
(1,865)
(3,104)

(4,597)

$ 32,427

$36,540

As of December 31, 2011, the Company had $11.1 million in deferred tax assets associated with foreign net
operating loss carryforwards which will begin to expire in 4 to 9 years. As of December 31, 2010, the Company
believed certain deferred tax assets associated with foreign net operating loss carryforwards would expire unused
based on the Company’s forward-looking financial information during 2010. Therefore, a valuation allowance of
$1.8 million was recorded against the Company’s net deferred tax assets as of December 31, 2010. Based upon
updated forward-looking financial information, during September 2011, the Company reversed the full valuation
allowance of $1.8 million as the Company believed, and continues to believe as of December 31, 2011, the
foreign net operating loss carryfowards will not expire unused. The reversal of the valuation allowance resulted
in a decrease to income tax expense of $1.8 million for the year ended December 31, 2011.

During 2011, the Company recorded $1.8 million in deferred tax assets associated with foreign tax credits.

As of December 31, 2011 the Company believed that the foreign taxes paid would not be creditable against its
future income taxes and therefore, the Company recorded a valuation allowance against these deferred tax assets.
The recording of the valuation allowance associated with foreign tax credits resulted in an increase to income tax
expense of $1.8 million for the year ended December 31, 2011.

As of December 31, 2011, withholding and U.S. taxes have not been provided on approximately $23.4
million of cumulative undistributed earnings of the Company’s non-U.S. subsidiaries because the Company
intends to indefinitely reinvest these earnings in its non-U.S. subsidiaries.

As of December 31, 2011 and 2010, the total liability for unrecognized tax benefits, including related
interest and penalties, was approximately $11.2 million and $6.4 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, 2011, 2010 and 2009:

(In thousands)

Beginning of year
Increases as a result of tax positions taken in a prior period
Decreases as a result of tax positions taken in a prior period
Increases as a result of tax positions taken during the current

period

Decreases as a result of tax positions taken during the current

period

Decreases as a result of settlements during the current period
Reductions as a result of a lapse of statute of limitations

during the current period

End of year

Year Ended December 31,

2011

2010

2009

$5,165
—
—

$2,598
—
—

$1,675
—
—

4,959

2,632

1,163

—
—

—
(43)

(341)

(65)

(197)

$9,783

$5,165

$2,598

As of December 31, 2011, $8.9 million of unrecognized tax benefits, excluding interest and penalties, would

impact the Company’s effective tax rate if recognized.

As of December 31, 2011, 2010 and 2009, the liability for unrecognized tax benefits included $1.4 million,
$1.3 million and $0.9 million, respectively, for the accrual of interest and penalties. For each of the years ended
December 31, 2011, 2010 and 2009, the Company recorded $0.4 million, $0.3 million and $0.2 million,
respectively, for the accrual of interest and penalties in its consolidated statement of income.

The Company files income tax returns in the U.S. federal jurisdiction and various state and foreign

jurisdictions. The majority of the Company’s returns for years before 2008 are no longer subject to U.S. federal,
state and local or foreign income tax examinations by tax authorities. The Company does not expect any material
changes to the total unrecognized tax benefits within the next twelve months.

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:

(In thousands, except per share amounts)

Numerator
Net income
Net income attributable to participating securities

Year Ended December 31,

2011

2010

2009

$96,919
(582)

$68,477
(548)

$46,785
(468)

Net income available to common shareholders (1)

$96,337

$67,929

$46,317

Denominator
Weighted average common shares outstanding
Effect of dilutive securities

Weighted average common shares and dilutive securities

outstanding

Earnings per share—basic
Earnings per share—diluted

(1) Basic weighted average common shares outstanding
Basic weighted average common shares outstanding
and participating securities
Percentage allocated to common stockholders

51,227
956

50,379
484

49,341
803

52,183

50,863

50,144

$
$

1.88
1.85

$
$

1.35
1.34

$
$

0.94
0.92

51,227

50,379

49,341

51,570

50,798

49,848

99.4%

99.2%

99.0%

Effects of potentially dilutive securities are presented only in periods in which they are dilutive. Stock

options, restricted stock units and warrants representing 0.1 million, 0.9 million and 1.1 million shares of
common stock were outstanding for each of the years ended December 31, 2011, 2010 and 2009, respectively,
but 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. Amended and Restated 2005 Omnibus Long-Term Incentive Plan (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. In 2009, stockholders approved amendments to the 2005
Plan, including an increase in the maximum number of shares available for issuance under the 2005 Plan from
2.7 million shares to 10.0 million shares, as well as limiting the number of stock options awarded in any calendar
year to 1.0 million for any one participant. Stock options and restricted stock and restricted stock unit awards
under the 2005 Plan generally vest ratably over a four to five year period. The exercise period for stock options is
generally ten 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 2005 Plan terminates in
2015. As of December 31, 2011, 5.3 million shares are available for future grants of awards under the 2005 Plan.

The Company’s 2000 Stock Option Plan (the “2000 Plan”) provided for the issuance of stock options,
restricted stock and other equity awards to officers, directors, key employees and other persons. The 2000 Plan
was terminated and superseded by the 2005 Plan upon the Company’s initial public offering in 2005. No further
awards may be granted under the 2000 Plan. The Company generally receives a tax deduction for any ordinary
income recognized by a participant in respect to an award under the 2000 Plan.

Total stock-based compensation expense for the years ended December 31, 2011, 2010 and 2009 was $18.1

million, $16.2 million and $12.9 million, respectively. As of December 31, 2011, the Company had $25.5

million of unrecognized compensation expense expected to be recognized over a weighted average period of 1.9
years. This does not include any expense related to performance-based stock options or restricted stock units.
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 by all eligible employees at a 15% discount from fair market value subject to certain limits as defined in
the ESPP. The maximum number of shares available under the ESPP is 1.0 million shares. During the years
ended December 31, 2011, 2010 and 2009, 30.0 thousand, 39.6 thousand and 59.8 thousand 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 $0.1 million 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 $75.0 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 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, 2011, 2010 and
2009 was $38.55, $16.71 and $7.79, 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,

2011

2010

2009

Risk-free interest rate
Average expected life in years
Expected volatility
Expected dividend yield

1.2% - 2.6%

6.25

54.4% - 56.1%
0%

1.6% - 3.1%
6.25 - 7.0
55.2% - 55.8%
0%

2.0% - 3.2%
5.0 - 6.5

53.4% - 56.2%
0%

A summary of the Company’s stock options as of December 31, 2011, 2010 and 2009, and changes during

the years then ended is presented below:

(In thousands, except per share amounts)

2011

2010

2009

Year Ended December 31,

Outstanding, beginning of year
Granted, at fair market value
Exercised
Expired
Forfeited

Outstanding, end of year

Number
of Stock
Options

2,974
110
(563)
(13)
(104)

Weighted
Average
Exercise
Price

$25.31
72.10
22.83
18.95
26.82

Number
of Stock
Options

2,831
1,435
(799)
(7)
(486)

Weighted
Average
Exercise
Price

$18.02
29.32
7.64
41.26
23.52

Number
of Stock
Options

2,456
1,364
(853)
(34)
(102)

Weighted
Average
Exercise
Price

$15.92
14.53
4.69
33.87
27.04

2,404

$27.99

2,974

$25.31

2,831

$18.02

Options exercisable, end of year

423

$25.42

304

$33.04

908

$11.58

The intrinsic value of stock options exercised during the years ended December 31, 2011, 2010 and 2009

was $27.4 million, $7.6 million and $14.8 million, respectively.

The following table summarizes information about stock options outstanding and exercisable as of

December 31, 2011:

(In thousands, except per share amounts)

Options Outstanding

Weighted
Average
Exercise
Price Per
Share

Weighted
Average
Remaining
Contractual
Life (Years)

Total
Intrinsic
Value

Number of
Underlying
Shares

Options Exercisable

Weighted
Average
Exercise
Price Per
Share

Weighted
Average
Remaining
Contractual
Life (Years)

Total
Intrinsic
Value

$27.99

7.6

$105,280

423

$25.42

6.2

$19,615

Number of
Underlying
Shares

2,404

Included in the tables above are 1.1 million and 1.3 million performance-based stock options granted to

officers and key employees under the 2005 Plan during the years ended December 31, 2010 and 2009,
respectively. These performance-based stock options have a weighted average exercise price of $20.75, and a
term of ten years. These performance-based options have vestings that are tied to the achievement of certain
combined annual operating income targets. Upon the achievement of each of the combined operating income
targets, 50% of the options vest and the remaining 50% vest one year later. If certain lower levels of combined
operating income are achieved, fewer or no options vest at that time and one year later, and the remaining stock
options are forfeited. As of December 31, 2010, the combined operating income targets related to the
performance-based stock options granted during the year ended December 31, 2009 were met; 50% of the
options vested on February 15, 2011, and the remaining 50% will vest on February 15, 2012, subject to continued
employment.

The weighted average fair value of these performance-based stock options is $11.66, and was estimated
using the Black-Scholes option-pricing model consistent with the weighted average assumptions included in the
table above. During the years ended December 31, 2011 and 2010, the Company recorded $7.5 million and $6.2
million, respectively, in stock-based compensation expense for these performance-based stock options. As of
December 31, 2011, the Company had $7.3 million of unrecognized compensation expense expected to be
recognized over a weighted average period of 1.8 years.

Restricted Stock and Restricted Stock Units

A summary of the Company’s restricted stock and restricted stock units as of December 31, 2011, 2010 and

2009, and changes during the years then ended is presented below:

(In thousands, except per share amounts)

2011

2010

2009

Year Ended December 31,

Outstanding, beginning of year
Granted
Forfeited
Vested
Outstanding, end of year

Number
of
Restricted
Shares

412
788
(227)
(150)
823

Weighted
Average
Value

$36.04
66.19
59.52
37.19
$58.23

Number
of
Restricted
Shares

488
195
(102)
(169)
412

Weighted
Average
Value

$37.40
33.46
39.68
34.81
$36.04

Number
of
Restricted
Shares

639
63
(19)
(195)
488

Weighted
Average
Value

$38.27
24.36
44.96
35.32
$37.40

Included in the table above are 0.4 million performance-based restricted stock units awarded during 2011 to
certain executives and key employees under the 2005 Plan. These performance-based restricted stock units have a
weighted average fair value of $67.83 and have vesting that is tied to the achievement of a certain combined annual
operating income target for 2012 and 2013. Upon the achievement of the combined operating income target, 50% of
the restricted stock units will vest on February 15, 2014 and the remaining 50% will vest on February 15, 2015. If
certain lower levels of combined operating income for 2012 and 2013 are achieved, fewer or no restricted stock
units will vest at that time and one year later, and the remaining restricted stock units will be forfeited. As of
December 31, 2011, the Company had not begun recording stock-based compensation expense for these
performance-based restricted stock units as the Company determined the achievement of the combined operating
income targets was not probable. The Company will assess the probability of the achievement of the operating
income targets at the end of each reporting period. If it becomes probable that the performance targets related to
these performance-based restricted stock units will be achieved, a cumulative adjustment will be recorded as if
ratable stock-based compensation expense had been recorded since the grant date. Additional stock based
compensation of up to $5.6 million would have been recorded through December 31, 2011 for these performance-
based restricted stock units had the full achievement of these operating income targets been deemed probable.

Warrants

In 2006, the Company issued fully vested and non-forfeitable warrants to purchase 480.0 thousand shares of

the Company’s Class A Common Stock to NFL Properties as partial consideration for footwear promotional
rights which were recorded as an intangible asset, refer to Note 6 for further information on this intangible asset.
With the assistance of an independent third party valuation firm, the Company assessed the fair value of the
warrants using various fair value models. Using these measures, the Company concluded that the fair value of the
warrants was $8.5 million. The warrants have a term of 12 years from the date of issuance and an exercise price
of $36.99 per share, which was the closing price of the Company’s Class A Common Stock on the date of
issuance. As of December 31, 2011, all outstanding warrants were exercisable, and no warrants were exercised.

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 $1.8 million, $1.2 million and $1.3 million for the years
ended December 31, 2011, 2010 and 2009, respectively. Shares of the Company’s Class A Common Stock are
not an investment option 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, 2011 and 2010, the Deferred
Compensation Plan obligations were $3.5 million and $3.6 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, 2011 and 2010, the assets held in the Rabbi Trust were TOLI policies with cash-
surrender values of $3.9 million and $3.6 million, respectively. These assets are consolidated as allowed by
accounting guidance, 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. Foreign Currency Risk Management and Derivatives

The Company is exposed to gains and losses resulting from fluctuations in foreign currency exchange rates
relating to transactions generated by its international subsidiaries in currencies other than their local currencies.
These gains and losses are primarily driven by intercompany transactions. From time to time, the Company may
elect to enter into foreign currency forward contracts to reduce the risk associated with foreign currency exchange
rate fluctuations on intercompany transactions and projected inventory purchases for its European and Canadian
subsidiaries. In addition, the Company may elect to enter into foreign currency forward contracts to reduce the risk
associated with foreign currency exchange rate fluctuations on Pound Sterling denominated balance sheet items.

As of December 31, 2011, the notional value of the Company’s outstanding foreign currency forward contracts
used to mitigate the foreign currency exchange rate fluctuations on its Canadian subsidiary’s intercompany transactions
was $51.1 million with contract maturities of 1 month or less. As of December 31, 2011, the notional value of the
Company’s outstanding foreign currency forward contracts used to mitigate the foreign currency exchange rate
fluctuations on its European subsidiary’s intercompany transactions was $50.0 million with contract maturities of 1
month. As of December 31, 2011, the notional value of the Company’s outstanding foreign currency forward contract
used to mitigate the foreign currency exchange rate fluctuations on Pounds Sterling denominated balance sheet items
was €10.5 million, or $13.6 million, with a contract maturity of 1 month. The foreign currency forward contracts are
not designated as cash flow hedges, and accordingly, changes in their fair value are recorded in earnings. The fair
values of the Company’s foreign currency forward contracts were liabilities of $0.7 million and $0.6 million as of
December 31, 2011 and 2010, respectively, and were included in accrued expenses on the consolidated balance sheets.
Refer to Note 10 for a discussion of the fair value measurements. Included in other expense, net were the following
amounts related to changes in foreign currency exchange rates and derivative foreign currency forward contracts:

(In thousands)

Unrealized foreign currency exchange rate gains (losses)
Realized foreign currency exchange rate gains (losses)
Unrealized derivative losses
Realized derivative gains (losses)

Year Ended December 31,

2011

2010

2009

$(4,027)
298
(31)
1,696

$(1,280)
(2,638)
(809)
3,549

$ 5,222
(261)
(1,060)
(4,412)

The Company enters into foreign currency forward 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 foreign currency forward contracts.
However, the Company monitors the credit quality of these financial institutions and considers the risk of
counterparty default to be minimal.

16. Related Party Transactions

The Company has an agreement to license a software system with a vendor whose Co-CEO is a director of
the Company. During the years ended December 31, 2011, 2010 and 2009, the Company paid $1.8 million, $1.5
million and $2.0 million, respectively, in licensing fees and related support services to this vendor. There were no
amounts payable to this related party as of December 31, 2011 and 2010.

The Company has an operating lease agreement with an entity controlled by the Company’s CEO to lease an
aircraft for business purposes. The Company paid $0.7 million, $1.0 million and $0.6 million in usage fees to this
entity for its use of the aircraft during the years ended December 31, 2011, 2010 and 2009, respectively. No
amounts were payable to this related party as of December 31, 2011 and 2010. The Company determined the
usage fees charged are at or below market.

17. Segment Data and Related Information

The Company’s operating segments are based on how the Chief Operating Decision Maker (“CODM”)
makes decisions about allocating resources and assessing performance. As such, the CODM receives discrete
financial information by geographic region based on the Company’s strategy to become a global brand. These
geographic regions include North America; Latin America; Europe, the Middle East and Africa (“EMEA”); and
Asia. The Company’s operating segments are based on these geographic regions. Each geographic segment
operates exclusively in one industry: the development, marketing and distribution of branded performance
apparel, footwear and accessories. Due to the insignificance of the EMEA, Latin America and Asia operating
segments, they have been combined into other foreign countries for disclosure purposes.

The geographic distribution of the Company’s net revenues, operating income and total assets are

summarized in the following tables based on the location of its customers and operations. Net revenues represent
sales to external customers for each segment. In addition to net revenues, operating income is a primary financial
measure used by the Company to evaluate performance of each segment. Intercompany balances were eliminated
for separate disclosure and corporate expenses from North America have not been allocated to other foreign
countries.

(In thousands)

Net revenues
North America
Other foreign countries

Total net revenues

(In thousands)

Operating income
North America
Other foreign countries

Total operating income

Interest expense, net
Other expense, net

Year Ended December 31,

2011

2010

2009

$1,383,346
89,338

$ 997,816
66,111

$808,020
48,391

$1,472,684

$1,063,927

$856,411

Year Ended December 31,

2011

2010

2009

$150,559
12,208

162,767
(3,841)
(2,064)

$102,806
9,549

112,355
(2,258)
(1,178)

$83,239
2,034

85,273
(2,344)
(511)

Income before income taxes

$156,862

$108,919

$82,418

(In thousands)

Total assets
North America
Other foreign countries

Total assets

December 31,

2011

2010

$842,121
77,089

$613,515
61,863

$919,210

$675,378

Net revenues by product category are as follows:

(In thousands)

Apparel
Footwear
Accessories

Total net sales

License revenues

Year Ended December 31,

2011

2010

2009

$1,122,031
181,684
132,400

1,436,115
36,569

$ 853,493
127,175
43,882

1,024,550
39,377

$651,779
136,224
35,077

823,080
33,331

Total net revenues

$1,472,684

$1,063,927

$856,411

As of December 31, 2011 and 2010, substantially all of the Company’s long-lived assets were located in the
United States. Net revenues in the United States were $1,325.8 million, $952.9 million and $771.2 million for the
years ended December 31, 2011, 2010 and 2009, respectively.

18. Unaudited Quarterly Financial Data

(In thousands)

2011

Net revenues
Gross profit
Income from operations
Net income
Earnings per share-basic
Earnings per share-diluted

2010

Net revenues
Gross profit
Income from operations
Net income
Earnings per share-basic
Earnings per share-diluted

19. Subsequent Events

Stockholders’ Equity

Quarter Ended (unaudited)

March 31,

June 30,

September 30, December 31,

$312,699
145,051
21,142
12,139
0.24
0.23

$
$

$291,336
134,779
11,358
6,241
0.12
0.12

$
$

$229,407
107,631
13,584
7,170
0.14
0.14

$
$

$204,786
99,926
6,892
3,502
0.07
0.07

$
$

$465,523
225,101
74,965
45,987
0.89
0.88

$
$

$328,568
167,372
56,689
34,857
0.68
0.68

$
$

$403,126
207,905
55,302
32,552
0.63
0.62

$
$

$301,166
155,578
35,190
22,948
0.45
0.44

$
$

Year Ended
December 31,

$1,472,684
712,836
162,767
96,919
1.88
1.85

$
$

$1,063,927
530,507
112,355
68,477
1.35
1.34

$
$

In February 2012, 150.0 thousand shares of Class B Convertible Common Stock were converted into shares

of Class A Common Stock on a one-for-one basis in connection with a stock sale.

Stock-Based Compensation

In February 2012, 0.4 million performance-based restricted stock units were awarded to certain officers and
key employees under the 2005 Plan. The performance-based restricted stock units have vesting that is tied to the
achievement of a certain combined annual operating income target for 2013 and 2014. Upon the achievement of
the combined operating income target, 50% of the restricted stock units will vest on February 15, 2015 and the
remaining 50% will vest on February 15, 2016. If certain lower levels of combined operating income for 2013
and 2014 are achieved, fewer or no restricted stock units will vest at that time and one year later, and the
remaining restricted stock units will be forfeited.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND

FINANCIAL DISCLOSURE

None

ITEM 9A. CONTROLS AND PROCEDURES

Our management has evaluated, under the supervision and with the participation of our Chief Executive

Officer and Chief Financial Officer, the effectiveness of our disclosure controls and procedures as of
December 31, 2011 pursuant to Rule 13a-15(b) under the Securities Exchange Act of 1934 (the “Exchange Act”).
Based on that evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that, as of
December 31, 2011, our disclosure controls and procedures are effective in ensuring that information required to
be disclosed in our Exchange Act reports is (1) recorded, processed, summarized and reported in a timely manner
and (2) accumulated and communicated to our management, including our Chief Executive Officer and Chief
Financial Officer, as appropriate to allow timely decisions regarding required disclosure. Refer to Item 8 of this
report for the “Report of Management on Internal Control over Financial Reporting.”

There has been no change in our internal control over financial reporting during the most recent fiscal
quarter that has materially affected, or that is reasonably likely to materially affect our internal control over
financial reporting.

ITEM 9B. OTHER INFORMATION

None

PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

The information required by this Item regarding directors is incorporated herein by reference from the 2012

Proxy Statement, under the headings “NOMINEES FOR ELECTION AT THE ANNUAL MEETING,”
“CORPORATE GOVERNANCE AND RELATED MATTERS: Audit Committee” and “SECTION 16(a)
BENEFICIAL OWNERSHIP REPORTING COMPLIANCE.” Information required by this Item regarding
executive officers is included under “Executive Officers of the Registrant” in Part 1 of this Form 10-K.

Code of Ethics

We have a written code of ethics in place that applies to all our employees, including our principal executive

officer, principal financial officer, and principal accounting officer and controller. A copy of our ethics policy is
available on our website: www.underarmour.com. We are required to disclose any change to, or waiver from, our
code of ethics for our senior financial officers. We intend to use our website as a method of disseminating this
disclosure as permitted by applicable SEC rules.

ITEM 11. EXECUTIVE COMPENSATION

The information required by this Item is incorporated by reference herein from the 2012 Proxy Statement
under the headings “CORPORATE GOVERNANCE AND RELATED MATTERS: Compensation of Directors,”
“EXECUTIVE COMPENSATION,” and “COMPENSATION COMMITTEE INTERLOCKS AND INSIDER
PARTICIPATION.”

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

AND RELATED STOCKHOLDER MATTERS

The information required by this Item is incorporated by reference herein from the 2012 Proxy Statement
under the heading “SECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN BENEFICIAL OWNERS
OF SHARES.” Also refer to Item 5 “Market for Registrant’s Common Equity, Related Stockholder Matters and
Issuer Purchases of Equity Securities.”

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR

INDEPENDENCE

The information required by this Item is incorporated by reference herein from the 2012 Proxy Statement

under the heading “TRANSACTIONS WITH RELATED PERSONS” and “CORPORATE GOVERNANCE
AND RELATED MATTERS—Independence of Directors.”

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

The information required by this Item is incorporated by reference herein from the 2012 Proxy Statement

under the heading “INDEPENDENT AUDITORS.”

PART IV

ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

a. The following documents are filed as part of this Form 10-K:

1. Financial Statements:

Report of Independent Registered Public Accounting Firm

Consolidated Balance Sheets as of December 31, 2011 and 2010

Consolidated Statements of Income for the Years Ended December 31, 2011, 2010 and 2009

Consolidated Statements of Stockholders’ Equity and Comprehensive Income for the Years Ended

December 31, 2011, 2010 and 2009

Consolidated Statements of Cash Flows for the Years Ended December 31, 2011, 2010 and 2009

Notes to the Audited Consolidated Financial Statements

2. Financial Statement Schedule

Schedule II—Valuation and Qualifying Accounts

All other schedules are omitted because they are not applicable or the required information is shown in the

consolidated financial statements or notes thereto.

3. Exhibits

The following exhibits are incorporated by reference or filed herewith. References to the Company’s 2005

Form 10-K are to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2005.
References to the Company’s 2007 Form 10-K are to the Registrant’s Annual Report on Form 10-K for the year
ended December 31, 2007. References to the Company’s 2009 Form 10-K are to the Registrant’s Annual Report
on Form 10-K for the year ended December 31, 2009. References to the Company’s 2010 Form 10-K are to the
Registrant’s Annual Report on Form 10-K for the year ended December 31, 2010.

Exhibit
No.

3.01

3.02

4.01

10.01

Amended and Restated Articles of Incorporation (incorporated by reference to Exhibit 3.01 of the
Company’s 2005 Form 10-K).

Amended and Restated By-Laws (incorporated by reference to Exhibit 3.02 of the Company’s 2005
Form 10-K).

Warrant Agreement between the Company and NFL Properties LLC dated as of August 3, 2006
(incorporated by reference to Exhibit 4.1 of the Current Report on Form 8-K filed August 7, 2006).

Credit Agreement among PNC Bank, National Association, as Administrative Agent, SunTrust Bank, as
Syndication Agent, Bank of America, N.A., as Documentation Agent, and the Lenders and the Guarantors
that are party thereto and the Company dated March 29, 2011 (incorporated by reference to Exhibit 10.04
of the Company’s Form 10-Q for the quarterly period ended June 30, 2011), as amended by First
Amendment to Credit Agreement dated September 16, 2011 (incorporated by reference to Exhibit 10.01 of
the Company’s Form 10-Q for the quarterly period ended September 30, 2011).

Exhibit
No.

10.02

10.03

10.04

Office lease by and between Beason Properties LLLP (as successor to 1450 Beason Street LLC) and the
Company dated December 14, 2007 (portions of this exhibit have been omitted pursuant to a request for
confidential treatment) (incorporated by reference to Exhibit 10.1 of the Current Report on Form 8-K filed
on December 20, 2007), as amended by the First Amendment dated June 4, 2008 (incorporated by
reference to Exhibit 10.04 of the Company’s Form 10-Q for the quarterly period ended June 30, 2008) and
the Second Amendment to Office Lease dated October 1, 2009 (portions of this exhibit have been omitted
pursuant to a request for confidential treatment) (incorporated by reference to Exhibit 10.01 of the
Company’s Form 10-Q for the quarterly period ended September 30, 2009).

Under Armour, Inc. Executive Incentive Plan (incorporated by reference to Exhibit 10.01 of the
Company’s Form 10-Q for the quarterly period ended March 31, 2008).*

Under Armour, Inc. Deferred Compensation Plan (incorporated by reference to Exhibit 10.15 of the
Company’s 2007 Form 10-K) and Amendment One to this plan (incorporated by reference to Exhibit
10.14 of the Company’s 2010 Form 10-K).*

10.05

Form of Change in Control Severance Agreement.*

10.06

10.07

10.08

10.09

10.10

Under Armour, Inc. Amended and Restated 2005 Omnibus Long-Term Incentive Plan (incorporated by
reference to Exhibit 10.01 of the Company’s Form 10-Q for the quarterly period ending March 31, 2009).*

Forms of Restricted Stock Grant Agreement under the Amended and Restated 2005 Omnibus Long-
Term Incentive Plan (filed herewith and incorporated by reference to Exhibits 10.22 a-b of the
Company’s 2007 Form 10-K and Exhibit 10.21 of the Company’s 2009 Form 10-K).*

Forms of Non-Qualified Stock Option Grant Agreement under the Amended and Restated 2005
Omnibus Long-Term Incentive Plan (filed herewith and incorporated by reference to Exhibits 10.23
b-c of the Company’s 2007 Form 10-K, Exhibit 10.22 of the Company’s 2009 Form 10-K and
Exhibit 10.18 of the Company’s 2010 Form 10-K).*

Form of Restricted Stock Unit Grant Agreement under the Amended and Restated 2005 Omnibus
Long-Term Incentive Plan.*

Forms of Performance-Based Stock Option Grant Agreement under the Amended and Restated 2005
Omnibus Long-Term Incentive Plan (incorporated by reference to Exhibits 10.02 of the Company’s
Form 10-Q for the quarterly period ended March 31, 2009 and Exhibit 10.03 of the Company’s Form
10-Q for the quarterly period ended March 31, 2010).*

10.11

Amendment to Stock Option Awards Effective August 3, 2011.*

10.12

10.13

10.14

10.15

Forms of Performance-Based Restricted Stock Unit Grant Agreement under the Amended and
Restated 2005 Omnibus Long-Term Incentive Plan (filed herewith and incorporated by reference to
Exhibit 10.05 of the Company’s Form 10-Q for the quarterly period ended June 30, 2011).*

Employee Confidentiality, Non-Competition and Non-Solicitation Agreement by and between Henry
Stafford and the Company dated April 12, 2010 (incorporated by reference to Exhibit 10.03 of the
Company’s Form 10-Q for the quarterly period ended March 31, 2011).*

Form of Employee Confidentiality, Non-Competition and Non-Solicitation Agreement by and
between certain executives and the Company.*

Agreement and Mutual General Release by and between Mark Dowley and the Company dated
April 8, 2011.*

Exhibit
No.

10.16

10.17

21.01

23.01

31.01

31.02

32.01

32.02

Under Armour, Inc. 2010 Non-Employee Director Compensation Plan (incorporated by reference to
Exhibit 10.01 of the Company’s Form 10-Q for the quarterly period ended March 31, 2010),
Amendment One to this plan (incorporated by reference to Exhibit 10.06 of the Company’s Form 10-Q
for the quarterly period ended June 30, 2011), Form of Initial Restricted Stock Unit Grant (incorporated
by reference to Exhibit 10.1 of the Current Report on Form 8-K filed June 6, 2006), Form of Annual
Stock Option Award (incorporated by reference to Exhibit 10.3 of the Current Report on Form 8-K filed
June 6, 2006) and Form of Annual Restricted Stock Unit Grant (incorporated by reference to Exhibit
10.6 of the Company’s Form 10-Q for the quarterly period ended June 30, 2011).*

Under Armour, Inc. 2006 Non-Employee Director Deferred Stock Unit Plan (incorporated by
reference to Exhibit 10.02 of the Company’s Form 10-Q for the quarterly period ended March 31,
2010) and Amendment One to this plan (incorporated by reference to Exhibit 10.23 of the
Company’s 2010 Form 10-K).*

List of Subsidiaries.

Consent of PricewaterhouseCoopers LLP.

Section 302 Chief Executive Officer Certification.

Section 302 Chief Financial Officer Certification.

Section 906 Chief Executive Officer Certification.

Section 906 Chief Financial Officer Certification.

101.INS

XBRL Instance Document

101.SCH

XBRL Taxonomy Extension Schema Document

101.CAL

XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF

XBRL Taxonomy Extension Definition Linkbase Document

101.LAB

XBRL Taxonomy Extension Label Linkbase Document

101.PRE

XBRL Taxonomy Extension Presentation Linkbase Document

* Management contract or a compensatory plan or arrangement required to be filed as an Exhibit pursuant to

Item 15(b) of Form 10-K.

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant

has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

SIGNATURES

UNDER ARMOUR, INC.

By: /s/ KEVIN A. PLANK

Kevin A. Plank
President, Chief Executive Officer and Chairman
of the Board of Directors

Dated: February 24, 2012

Pursuant to the requirements of the Securities Act of 1934, this report has been signed below by the

following persons on behalf of the registrant and in the capacities and on the date indicated.

/S/ KEVIN A. PLANK

Kevin A. Plank

President, Chief Executive Officer and Chairman of the

Board of Directors (principal executive officer)

/S/ BRAD DICKERSON

Chief Financial Officer (principal accounting and

Brad Dickerson

financial officer)

/S/ BYRON K. ADAMS, JR.

Director

Byron K. Adams, Jr.

/S/ DOUGLAS E. COLTHARP

Director

Douglas E. Coltharp

/S/ ANTHONY W. DEERING

Director

Anthony W. Deering

/S/ A.B. KRONGARD

A.B. Krongard

Director

/S/ WILLIAM R. MCDERMOTT

Director

William R. McDermott

/S/ HARVEY L. SANDERS

Director

Harvey L. Sanders

/S/ THOMAS J. SIPPEL

Thomas J. Sippel

Dated: February 24, 2012

Director

Schedule II

Valuation and Qualifying Accounts

(In thousands)

Description

Allowance for doubtful accounts
For the year ended December 31, 2011
For the year ended December 31, 2010
For the year ended December 31, 2009

Sales returns and allowances
For the year ended December 31, 2011
For the year ended December 31, 2010
For the year ended December 31, 2009

Deferred tax asset valuation allowance
For the year ended December 31, 2011
For the year ended December 31, 2010

Balance at
Beginning
of Year

Charged to
Costs and
Expenses

Write-Offs
Net of
Recoveries

Balance at
End of
Year

$ 4,869
5,156
4,180

699
190
1,637

$ (1,498) $ 4,070
4,869
5,156

(477)
(661)

$16,827
13,969
15,961

$74,245
48,136
61,499

$(70,472) $20,600
16,827
(45,278)
13,969
(63,491)

$ 1,765
—

$ 1,784
1,765

$ (1,765) $ 1,784
1,765

—

[THIS PAGE INTENTIONALLY LEFT BLANK]

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EXECUTIVE TEAM

KEVIN A. PLANK
CHAIRMAN OF THE BOARD OF
DIRECTORS, CHIEF EXECUTIVE
OFFICER AND PRESIDENT

BYRON K. ADAMS, JR.
CHIEF PERFORMANCE OFFICER

BRAD DICKERSON
CHIEF FINANCIAL OFFICER

KIP FULKS
CHIEF OPERATING OFFICER

SCOTT PLANK
EVP, BUSINESS DEVELOPMENT

STEPHEN BATTISTA
SVP, CREATIVE

MICHAEL FAFAUL
SVP, SUPPLY CHAIN

JANET FOX
SVP, SOURCING

JOSEPH (JODY) GILES
CHIEF INFORMATION OFFICER

KEVIN HALEY
SVP, INNOVATION

EUGENE MCCARTHY
SVP, FOOTWEAR

MATT MIRCHIN
SVP, GLOBAL SPORTS MARKETING

ADAM PEAKE
SVP, US SALES

RICHARD RAPUANO
SVP, PLANNING

STUART REDSUN
SVP, GLOBAL BRAND MARKETING

HENRY STAFFORD
SVP, APPAREL, OUTDOOR
& ACCESSORIES

EDITH MATTHEWS
VP, HR BUSINESS PARTNERS

TODD MONTESANO
VP, PARTNERSHIPS & ALLIANCES

DIANE PELKEY
VP, GLOBAL COMMUNICATION
& ENTERTAINMENT

CYNTHIA RAPOSO
VP, LEGAL

DAVID BERGMAN
VP, CORPORATE CONTROLLER

JOHN ROGERS
VP/GM, ECOMMERCE

JAMES BRAGG
VP, TEAM SPORTS

BRIAN CUMMINGS
VP, APPAREL SALES

SCOTT SALKELD
VP, STRATEGIC PLANNING

DANIEL SAWALL
VP, RETAIL

DAVID DEMSKY
VP, ECOMMERCE OPERATIONS

MATTHEW SHEARER
VP/GM, AMERICAS

BRENDAN EDGERTON
VP, ECOMMERCE MARKETING

GLENN SILBERT
VP, INTERNATIONAL & YOUTH PRODUCT

EDWARD GIARD
VP, LICENSING & ACCESSORIES

STEVE SOMMERS
VP, BRAND MANAGEMENT

KEITH HOOVER
VP, SOURCING RESOURCES

AMY LARKIN
VP, CULTURE

JOHN STANTON
VP, CORPORATE GOVERNANCE
& COMPLIANCE

GWYN WIADRO
VP, WOMEN’S APPAREL

BOARD OF DIRECTORS

KEVIN A. PLANK
CHAIRMAN OF THE BOARD OF
DIRECTORS, CHIEF EXECUTIVE
OFFICER AND PRESIDENT

BYRON K. ADAMS, JR.
CHIEF PERFORMANCE OFFICER

DOUGLAS E. COLTHARP
EXECUTIVE VICE PRESIDENT AND CHIEF
FINANCIAL OFFICER, HEALTHSOUTH
CORPORATION

ANTHONY W. DEERING
FORMER CHIEF EXECUTIVE OFFICER
AND CHAIRMAN OF THE BOARD OF
DIRECTORS, THE ROUSE COMPANY

A.B. KRONGARD
FORMER CHIEF EXECUTIVE OFFICER
AND CHAIRMAN OF THE BOARD
OF DIRECTORS, ALEX.BROWN,
INCORPORATED

WILLIAM R. MCDERMOTT
CO-CHIEF EXECUTIVE OFFICER AND
EXECUTIVE BOARD MEMBER, SAP AG

HARVEY L. SANDERS
FORMER CHIEF EXECUTIVE OFFICER
AND CHAIRMAN OF THE BOARD OF
DIRECTORS, NAUTICA ENTERPRISES, INC.

THOMAS J. SIPPEL
PARTNER, GILL SIPPEL & GALLAGHER

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UNDER ARMOUR, INC.
1020 HULL STREET
BALTIMORE, MD 21230

1.888.7ARMOUR