Item 2.05. Costs Associated With Exit or Disposal Activities.
On April 3, 2020, Under Armour, Inc. ("Under Armour", or the "Company")
announced a 2020 restructuring plan outlining its expectations of incurring
approximately $475 million to $525 million of estimated pre-tax restructuring
and related charges during 2020. As previously disclosed, this restructuring
plan was developed prior to the Company assessing the potential impacts of the
COVID-19 pandemic and the Company stated that it would continue to evaluate
necessary actions in response to the pandemic.
After further review, the Company has identified further opportunities and on
September 2, 2020, the Company's Board of Directors approved a $75 million
increase to the restructuring plan, resulting in an updated 2020 restructuring
plan of approximately $550 million to $600 million of total estimated pre-tax
restructuring and related charges. The Company anticipates that these additional
restructuring and related charges will include up to:
•Approximately $60 million of additional cash charges, consisting of up to: $40
million in contract termination and other restructuring costs, $15 million in
facility and lease termination costs, and $5 million in employee severance and
benefit costs; and
•Approximately $15 million of additional non-cash charges, consisting of
intangibles and other asset related impairments.
Following these increases, within the updated approximately $550 million to $600
million of total estimated pre-tax restructuring and related charges, the
Company now expects to incur up to:
•Approximately $235 million of cash charges including up to approximately $135
million of contract termination and other restructuring costs, $70 million of
facility and lease termination costs, and $30 million in employee severance and
benefit costs related to a reduction of approximately 600 employees primarily in
its global corporate workforce; and,
•Approximately $365 million of non-cash charges consisting of a $291 million
impairment related to its New York City flagship retail store recognized during
the three months ended March 31, 2020, and up to approximately $74 million of
intangibles and other asset related impairments.
The Company currently anticipates that the majority of the remaining
restructuring and related charges will occur by the end of 2020. Through the six
months ended June 30, 2020, the Company had incurred approximately $340 million
in restructuring and related charges ($326 million in non-cash and $14 million
in cash related charges). The Company anticipates significant long-term cost
savings as a result of its 2020 restructuring plan. Given the timing of this
announcement within the current fiscal year and expected timing of the
realization of additional benefits, the Company continues to expect
approximately $40 million to $60 million in pre-tax benefits during 2020.
This disclosure contains forward-looking statements within the "safe harbor"
provisions of the Private Securities Litigation Reform Act of 1995. All
statements other than those that are purely historical are forward-looking
statements and include statements regarding anticipated charges and
restructuring costs and the timing of and projected savings relating to these
measures. These forward-looking statements are subject to risks, uncertainties,
assumptions and changes in circumstances that may cause the estimated future
impact of these restructuring charges and costs to differ materially from the
forward-looking statements. These risks include the Company's ability to
successfully execute its restructuring plan, higher than anticipated costs or
delays in implementing the restructuring plan, management distraction from
ongoing business activities, damage to the Company's reputation and brand image
and workforce attrition beyond planned restructuring related reductions.
Additional information regarding other factors that could cause the Company's
results to differ can be found in the Company's Quarterly Reports on Form 10-Q
for the fiscal quarters ended June 30, 2020 and March 31, 2020, the Company's
Annual Report on Form 10-K for the fiscal year ended December 31, 2019, and the
Company's subsequent filings with the U.S. Securities and Exchange Commission.
The forward-looking statements contained in this disclosure reflect the
Company's views and assumptions only as of the date of this Current Report on
Form 8-K. The Company undertakes no obligation to update any forward-looking
statement to reflect events or circumstances after the date on which this
disclosure is made or to reflect the occurrence of unanticipated events.

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