Under Armour 2012 Annual Report Download - page 66

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 year ended December 31, 2010 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 12 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. The fair value of the
interest rate swap contract is based on the net difference between the fixed interest to be paid and variable
interest to be received over the term of the contract based on current market rates.
Recently Issued Accounting Standards
In February 2013, the Financial Accounting Standards Board (“FASB”) issued an Accounting Standards
Update which requires companies to present either in a single note or parenthetically on the face of the financial
statements, the effect of significant amounts reclassified from each component of accumulated other comprehensive
income based on its source and the income statement line items affected by the reclassification. This guidance is
effective for annual and interim reporting periods beginning after December 15, 2012. The Company believes the
adoption of this pronouncement will not have a material impact on its consolidated financial statements.
Recently Adopted Accounting Standards
In July 2012, the FASB issued an Accounting Standards Update which allows companies to assess
qualitative factors to determine the likelihood of indefinite-lived intangible asset impairment and whether it is
necessary to perform the quantitative impairment test currently required. This guidance is effective for annual
and interim impairment tests performed for fiscal years beginning after September 15, 2012, with early adoption
permitted. The early adoption of this pronouncement did not have an impact on the Company’s consolidated
financial statements.
3. Acquisitions
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 December 31, 2012, 141.4 thousand square feet of the
400.0 thousand square feet acquired was leased to third party tenants with remaining lease terms ranging from 1
month to 13.5 years. The Company intends to occupy additional space as it becomes available.
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