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36
Research฀In฀Motion฀Limited฀฀|฀฀Incorporated฀Under฀the฀Laws฀of฀Ontario฀(United฀States฀dollars,฀in฀thousands฀except฀per฀share฀data฀or฀as฀otherwise฀indicated)
37
For฀the฀years฀ended฀March฀1,฀2003,฀March฀2,฀2002฀and฀February฀28,฀2001
8.฀Income฀Taxes
The฀difference฀between฀the฀amount฀of฀the฀provision฀for฀(recovery฀of)฀income฀taxes฀and฀the฀amount฀
computed฀by฀multiplying฀income฀before฀taxes฀by฀the฀statutory฀Canadian฀rate฀is฀reconciled฀as฀follows:
฀ ฀฀ ฀ March฀1,฀2003฀฀ ฀March฀2,฀2002฀฀ ฀February฀28,฀2001฀
Expected฀Canadian฀tax฀rate฀ ฀ 38.3%฀ ฀ 41.2%฀ ฀ 44.0%
Expected฀tax฀provision฀(recovery)฀ ฀$฀ (44,990)฀ ฀$฀ (15,785)฀ ฀$฀ 1,549฀
Differences฀in฀taxes฀resulting฀from:฀ ฀ ฀
฀ Manufacturing฀and฀processing฀activities฀ ฀฀ 3,951฀฀ ฀฀ 1,801฀฀ ฀฀ (1,095)
฀฀ Increase฀in฀valuation฀allowance฀ ฀฀ 61,969฀฀ ฀฀ 1,530฀฀ ฀฀ 3,245฀
฀฀ Non-deductible฀portion฀of฀unrealized฀capital฀losses฀ ฀฀ –฀฀ ฀฀ 1,013฀฀ ฀฀ 3,245฀
฀฀ Foreign฀tax฀rate฀differences฀ ฀฀ 7,352฀฀ ฀฀ (3,192)฀ ฀฀ 2,080฀
฀฀ Enacted฀tax฀rate฀changes฀ ฀฀ 4,835฀฀ ฀฀ 2,960฀฀ ฀ ฀–฀
฀฀ Other฀differences฀ ฀฀ ฀ (2,011)฀ ฀฀ 1,810฀฀ ฀฀ 707฀
฀ ฀฀ ฀ $฀ 31,106฀฀ ฀$฀ (9,863)฀ ฀$฀ 9,731฀
฀ ฀ ฀฀ March฀1,฀2003฀฀ ฀March฀2,฀2002฀฀ ฀February฀28,฀2001฀
Income฀(loss)฀before฀income฀taxes:฀ ฀ ฀ ฀
฀ Canadian฀ ฀ ฀$฀(102,954)฀ ฀$฀ (46,845)฀ ฀$฀ (2,485)
฀ Foreign฀ ฀ ฀฀ (14,604)฀ ฀฀ 8,503฀฀ ฀฀ 6,005฀
฀ ฀ ฀฀ $฀ (117,558)฀ ฀$฀ (38,342)฀ ฀$฀ 3,520฀
The฀provision฀for฀income฀taxes฀consists฀of฀the฀following:
Provision฀for฀(recovery฀of)฀income฀taxes:฀ March฀1,฀2003฀฀ ฀March฀2,฀2002฀฀ ฀February฀28,฀2001฀
Current฀ ฀ ฀
฀฀ Canadian฀ ฀฀ $฀ (8)฀ ฀$฀ 6,756฀฀ ฀$฀ 2,296฀
฀฀ Foreign฀ ฀฀ 3,521฀฀ ฀฀ 302฀฀ ฀฀ 2,424฀
฀Future฀ ฀ ฀
฀฀ Canadian฀ ฀฀ ฀ 27,593฀฀ ฀฀ (17,283)฀ ฀฀ 5,011฀
฀฀ Foreign฀ ฀ –฀ ฀฀ 362฀฀ ฀฀ –
฀ ฀ ฀ ฀$฀ 31,106฀฀ ฀$฀ (9,863)฀ ฀$฀ 9,731
฀
The฀tax฀effects฀of฀signicant฀temporary฀differences฀are฀as฀follows:
฀ ฀฀ ฀ ฀ ฀ March฀1,฀2003฀฀ ฀March฀2,฀2002฀
Assets฀ ฀
฀฀ Financing฀costs฀ ฀฀ ฀ $฀ 4,398฀฀ ฀$฀ 6,856฀
฀฀ Non-deductible฀reserves฀ ฀฀ ฀ ฀ 6,622฀฀ ฀฀ 5,004฀
฀฀ Research฀and฀development฀incentives฀ ฀฀ ฀ ฀ 24,897฀฀ ฀฀ 17,726฀
฀฀ Tax฀losses฀ ฀฀ ฀ ฀ 29,938฀ ฀฀ 15,100
฀ Capital฀assets฀ ฀ ฀ ฀ 2,614฀ ฀ –฀
฀฀ Other฀tax฀carryforwards฀ ฀฀ ฀ ฀ 186฀฀ ฀฀ 2,450฀
฀ ฀฀ ฀ ฀ ฀ ฀ 68,655฀฀ ฀฀ 47,136฀
Less:฀valuation฀allowance฀ ฀฀ ฀ ฀ 68,655฀฀ ฀฀ 5,870฀
฀ ฀฀ ฀ ฀ ฀ ฀ –฀ ฀฀ 41,266฀
Liabilities฀ ฀
฀฀ Capital฀assets฀ ฀฀ ฀ ฀ –฀฀ ฀฀ 12,668฀
Net฀future฀income฀tax฀assets฀฀ ฀฀ ฀ $฀ –฀฀ ฀$฀ 28,598฀
฀
During฀the฀third฀quarter฀of฀scal฀2003,฀the฀Company฀determined฀that฀a฀signicant฀degree฀of฀
uncertainty฀existed฀regarding฀the฀realization฀of฀the฀future฀tax฀assets฀and฀that฀a฀full฀valuation฀allowance฀
was฀required.฀As฀a฀result฀of฀the฀increased฀valuation฀allowance,฀future฀tax฀assets฀of฀$68,655฀have฀not฀