Blackberry 2005 Annual Report Download - page 29

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27
Investment Income
Investment income increased by $26.5 million to $37.1 million in fiscal 2005 from $10.6 million in fiscal 2004.
The increase primarily reflects the incremental interest income as a result of the significant increase in cash,
cash equivalents, short-term investments and investments during the current year compared to the prior year,
which included the $905.2 million in net proceeds from the Company’s public offering during the fourth
quarter of fiscal 2004, as well as improved interest rate yields in fiscal 2005 compared to 2004.
Income Taxes
During the fourth quarter of fiscal 2005, with the resolution of the NTP patent litigation matter, the Company
determined that it was “more likely than not” that it would realize the full amount of the deferred tax asset and
reversed the valuation allowance. Consequently, the Company recorded a net tax recovery of $142.2 million in
fiscal 2005, including a recovery with respect to deferred income taxes of $143.7 million. See also note 9 to the
Consolidated Financial Statements and “Critical Accounting Policies and Estimates – Income Taxes”.
The Company recorded a current tax recovery of $4.2 million in the fourth quarter of fiscal 2004 to reflect
the resolution of certain tax uncertainties previously provided for. The Company recorded nil deferred income
tax expense in fiscal 2004 as the Company’s income tax expense with respect to pre-tax income earned was
offset by the utilization of previously unrecognized deferred tax assets. The Company maintained its previous
determination that it still did not meet the “more likely than not” standard under U.S. and Canadian GAAP with
respect to the realization of its deferred income tax asset balance and that a full valuation allowance was
required as at February 28, 2004.
The Company has not provided for Canadian income taxes or foreign withholding taxes that would apply
on the distribution of the earnings of its non-Canadian subsidiaries, as these earnings are intended to be
reinvested indefinitely by these subsidiaries.
Net Income
Net income increased by $161.6 million to $213.4 million, or $1.14 per share basic and $1.09 per share diluted,
in fiscal 2005 compared to net income of $51.8 million, or $0.33 per share basic and $0.31 per share diluted,
in the prior year. See “Executive Summary” for an analysis and reconciliation of the fiscal 2005 increase in net
income and earnings per share.
For the years ended February 26, 2005, February 28, 2004 and March 1, 2003