Focus on Analysis | Under Armour, Inc (Learning Objectives I, 3, 5, 7, 8: Measure the cost of plant assets; explain plant asset activity, apply GAAP for intangible assets, explain an asset impairment, analyze rate of return on assets; analyze the cash flow impact of long-lived asset transactions) Retrieve the 2016 Under Armour financial statements at www.sec.gov by clicking on Filings and then searching for "Under Armour under Company Filings. When you see the list of filings for the company, select the Form 10-K for 2016. Be sure to retrieve the 2016 financial statements, not another year. This case leads you through an analysis of the activity for some of Under Armour's long-term assets, as well as the calculation of its rate of return on total assets Requirements 1. On the statement of cash flows, how much did Under Armour pay for property and equip- ment during 2016? In what section of the cash flows statement do you find this amount? 2. Which depreciation method does Under Ar se? Over what range of useful lives does Under Armour depreciate various types of fixed assets? You can find discussions of this in Note 2 (Summary of Significant Accounting Policies). 3. Review the information in Note 3 (Property and Equipment, Net). List the categories of Under Armour's property and equipment as of December 31, 2016, and December 31, 2015. How much depreciation expense is included in the calculation of net income for these two fiscal years? Does it appear that Under Armour's property and equipment was proportionately newer or older at the end of 2016 (vs. 2015)? Explain your answer. Challenge) 4. Examine Note 4 (Goodwill and Intangible Assets, Net) and Note 2. Briefly describe Under Armour's accounting for goodwill and other intangible assets. What other types of intan gible assets did Under Armour own as of December 31,2016? 5. Using DuPont Analysis, calculate Under Armour's rate of return on total assets for fiscal 2016 and fiscal 2015. Total assets at December 31, 2014 (the end of its 2014 fiscal year) were $2,095 million. Did the company perform better or worse in 2016 than in 2015? Use millions for ratios. 22183 2.712 .703 103 204 2. Summary of Sgnincant Accounting Polilcles expand the Under Nmour Connected Frezz communty. The purchase once allocation for each cqueton irenected in the oonsoldaled balence :hect as at December 31, 2015. On March 16, 2016, te Board of ic s approved the ssuanca o na c msan ew casa C non o ng oo on stod me to a, the Class C ck The aans C stock as kaec tro st d dMnd on a ona fora e ba s 10 al dst g a dars of the company's Cass A anc Class B common stock Tha sh res of aasa C ock ere dis tut d on 0 June 3, 2016, the EN d 01 Drectorz pro ed r payment of 359 0 mil didend 1 he hol c '5 af the Compr 's se stock n connection ith shrt der t gat on ea ed tol e ce on at the Class C s oc The Compan :8 Dard of Dret pro ed the payment of ths d de d irt the om of d oral h iss 0102% C 2c th cach n leu o The Corma y canaders al h li ac r et erts th an o na mz my oft ee months 0 le:: date at ncep 0 be ca and cash equivalents. I c ded in interest expense net or the ?sr ended December 31, 2015 2 nd 2014 was rest nc me of $2.57.7 hausar d 81040 t Dusand and St thousard espectve re at ec to cash and Cancentraton cf cut mer r Not A menca acto med for 101s and 1p t olaccou ANowace for Douctut Accounts s ecer at as of Dece ricer 31 2016 and Uece ter 31 2015, tspectie . The Comp ry's argest cumner medior 10% 12% and 145t o' net revenues ro the ?"rs ended Dece ter 31 2016. 2015 and 2014 respect The Connay makDG on es matas elar q 1e colat tit, o accounts ecehae and malnta an alo anoe or est an losses ma t a for te nablity of hs o sto ers to make equirad pa mare n dlt m in te mount of the meene th d any CD aidas hst rical avels of cred lessen and s gntcan economic dawa om ants thin tha Property nd Equpment, Nel Land 3.34 Goodwil and Intzngbie Agcets, Nct 733 Focus on Analysis | Under Armour, Inc (Learning Objectives I, 3, 5, 7, 8: Measure the cost of plant assets; explain plant asset activity, apply GAAP for intangible assets, explain an asset impairment, analyze rate of return on assets; analyze the cash flow impact of long-lived asset transactions) Retrieve the 2016 Under Armour financial statements at www.sec.gov by clicking on Filings and then searching for "Under Armour under Company Filings. When you see the list of filings for the company, select the Form 10-K for 2016. Be sure to retrieve the 2016 financial statements, not another year. This case leads you through an analysis of the activity for some of Under Armour's long-term assets, as well as the calculation of its rate of return on total assets Requirements 1. On the statement of cash flows, how much did Under Armour pay for property and equip- ment during 2016? In what section of the cash flows statement do you find this amount? 2. Which depreciation method does Under Ar se? Over what range of useful lives does Under Armour depreciate various types of fixed assets? You can find discussions of this in Note 2 (Summary of Significant Accounting Policies). 3. Review the information in Note 3 (Property and Equipment, Net). List the categories of Under Armour's property and equipment as of December 31, 2016, and December 31, 2015. How much depreciation expense is included in the calculation of net income for these two fiscal years? Does it appear that Under Armour's property and equipment was proportionately newer or older at the end of 2016 (vs. 2015)? Explain your answer. Challenge) 4. Examine Note 4 (Goodwill and Intangible Assets, Net) and Note 2. Briefly describe Under Armour's accounting for goodwill and other intangible assets. What other types of intan gible assets did Under Armour own as of December 31,2016? 5. Using DuPont Analysis, calculate Under Armour's rate of return on total assets for fiscal 2016 and fiscal 2015. Total assets at December 31, 2014 (the end of its 2014 fiscal year) were $2,095 million. Did the company perform better or worse in 2016 than in 2015? Use millions for ratios. 22183 2.712 .703 103 204 2. Summary of Sgnincant Accounting Polilcles expand the Under Nmour Connected Frezz communty. The purchase once allocation for each cqueton irenected in the oonsoldaled balence :hect as at December 31, 2015. On March 16, 2016, te Board of ic s approved the ssuanca o na c msan ew casa C non o ng oo on stod me to a, the Class C ck The aans C stock as kaec tro st d dMnd on a ona fora e ba s 10 al dst g a dars of the company's Cass A anc Class B common stock Tha sh res of aasa C ock ere dis tut d on 0 June 3, 2016, the EN d 01 Drectorz pro ed r payment of 359 0 mil didend 1 he hol c '5 af the Compr 's se stock n connection ith shrt der t gat on ea ed tol e ce on at the Class C s oc The Compan :8 Dard of Dret pro ed the payment of ths d de d irt the om of d oral h iss 0102% C 2c th cach n leu o The Corma y canaders al h li ac r et erts th an o na mz my oft ee months 0 le:: date at ncep 0 be ca and cash equivalents. I c ded in interest expense net or the ?sr ended December 31, 2015 2 nd 2014 was rest nc me of $2.57.7 hausar d 81040 t Dusand and St thousard espectve re at ec to cash and Cancentraton cf cut mer r Not A menca acto med for 101s and 1p t olaccou ANowace for Douctut Accounts s ecer at as of Dece ricer 31 2016 and Uece ter 31 2015, tspectie . The Comp ry's argest cumner medior 10% 12% and 145t o' net revenues ro the ?"rs ended Dece ter 31 2016. 2015 and 2014 respect The Connay makDG on es matas elar q 1e colat tit, o accounts ecehae and malnta an alo anoe or est an losses ma t a for te nablity of hs o sto ers to make equirad pa mare n dlt m in te mount of the meene th d any CD aidas hst rical avels of cred lessen and s gntcan economic dawa om ants thin tha Property nd Equpment, Nel Land 3.34 Goodwil and Intzngbie Agcets, Nct 733