Under Armour 2008 Annual Report Download - page 54

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Other income (expense), net included the following amounts related to changes in foreign currency
exchange rates and derivative foreign currency forward contracts:
Year Ended December 31,
(In thousands) 2008 2007 2006
Unrealized foreign currency exchange rate gains (losses) $(5,459) $2,567 $(161)
Realized foreign currency exchange rate gains (losses) (2,166) 174 520
Unrealized derivative gains (losses) 1,650 (243) —
Realized derivative gains (losses) (204) (469) —
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 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
See “Quantitative and Qualitative Disclosure about Market Risk” under Item 7. “Management’s Discussion
and Analysis of Financial Conditions and Results of Operations” and Item 1A. “Risk Factors” of this Form 10-K
for information required by this Item.
46