Under Armour 2007 Annual Report Download - page 66

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years beginning after November 15, 2007, however the FASB has delayed the effective date of SFAS 157 to
fiscal years beginning after November 15, 2008 for nonfinancial assets and nonfinancial liabilities, except those
items recognized or disclosed at fair value on an annual or more frequently occurring basis. The Company does
not believe that the adoption of SFAS 157 will have a material impact on its consolidated financial statements.
In June 2006, the FASB issued FIN No. 48, Accounting for Uncertainty in Income Taxes—an interpretation
of FASB Statement No. 109 (“FIN 48”), which provides additional guidance and clarifies the accounting for
uncertainty in income tax positions. FIN 48 defines the threshold for recognizing tax return positions in the
financial statements as “more likely than not” that the position is sustainable, based on its technical merits. FIN
48 also provides guidance on the measurement, classification and disclosure of tax return positions in the
financial statements. FIN 48 was effective for the first reporting period beginning after December 15, 2006, with
the cumulative effect of the change in accounting principle recorded as an adjustment to the beginning balance of
retained earnings in the period of adoption. Upon adoption of FIN 48 as of January 1, 2007, the Company
recorded a $1.2 million decrease to the beginning balance of retained earnings (see Note 11).
Reclassifications
Certain balances in 2006 and 2005 have been reclassified to conform to the current year presentation. These
changes had no impact on previously reported net income or stockholders’ equity.
3. Inventories
Inventories consisted of the following:
December 31,
(In thousands) 2007 2006
Finished goods ................................................... $169,560 $83,618
Raw materials ................................................... 1,180 1,321
Work-in-process ................................................. 208 133
Subtotal inventories ........................................... 170,948 85,072
Inventories reserve ............................................... (4,866) (4,041)
Total inventories ............................................. $166,082 $81,031
4. Property and Equipment
Property and equipment consisted of the following:
December 31,
(In thousands) 2007 2006
Furniture, fixtures and displays ..................................... $25,853 $ 17,178
Office equipment ................................................ 11,295 6,639
Software ....................................................... 9,849 4,928
Plant equipment ................................................. 13,867 5,401
Leasehold improvements .......................................... 11,598 6,700
Construction in progress ........................................... 10,411 8,346
Other .......................................................... 814 24
Subtotal property and equipment ................................ 83,687 49,216
Accumulated depreciation and amortization ........................... (31,355) (19,293)
Property and equipment, net .................................... $52,332 $ 29,923
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