Blackberry 2008 Annual Report Download - page 70

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68
RESEARCH IN MOTION LIMITED
notes to the consolidated financial statements continued
In thousands of United States dollars, except share and per share data, and except as otherwise indicated
10. LONG-TERM DEBT
At March 1, 2008, long-term debt consisted of mortgages
with interest rates ranging between 6.88% and 7.90%, against
which certain land and building are pledged as collateral. The
carrying value of the collateral at March 1, 2008 is $10,295.
All mortgage loans are denominated in Canadian dollars and
mature on March 1, 2009.
Interest expense on long-term debt for the year was $518
(March 3, 2007 - $494; March 4, 2006 - $483).
The scheduled long-term debt principal payments for the
fiscal years 2009 through to maturity are as follows:
For the years ending
2009 $ 349
2010 7,259
$ 7,608
The Company has a $100 million Demand Credit Facility (the
“Facility”) to support and secure operating and financing
requirements. As at March 1, 2008, the Company has utilized
$18.4 million of the Facility for outstanding letters of credit
and $81.6 million of the Facility was unused. The Company
has pledged specific investments as security for this Facility.
The Company has an additional $2.6 million Demand
Credit Facility (the “Additional Facility”). The Additional
Facility is used to support and secure other operating and
financing requirements. As at March 1, 2008, the Company
has utilized $1.5 million of the Additional Facility for
outstanding letters of credit and $1.1 million of this facility was
unused. The Company has pledged specific investments as
security for this facility.
11. CAPITAL STOCK
(a) Share capital
The Company is authorized to issue an unlimited number
of non-voting, redeemable, retractable Class A common
shares, an unlimited number of voting common shares and
an unlimited number of non-voting, cumulative, redeemable,
retractable preferred shares. There are no Class A common
shares or preferred shares outstanding.
The Company declared a 3-for-1 stock split of the
Company’s outstanding common shares on June 28,
2007. The stock split was implemented by way of a stock
dividend. Shareholders received an additional two
common shares of the Company for each common share
held. The stock dividend was paid on August 20, 2007 to
common shareholders of record at the close of business
on August 17, 2007. All share, earnings per share and
As at March 1, 2008, the total unrecognized tax benefits
of $175.4 million include approximately $138.2 million of
unrecognized tax benefits that have been netted against
related deferred income tax assets. The remaining $37.2
million is recorded within current taxes payable and other
non-current taxes payable on the Company’s consolidated
balance sheet as of March 1, 2008.
The Company’s total unrecognized tax benefits that, if
recognized, would affect the Company’s effective tax rate
were $152.7 and $175.4 million as at the adoption date and
March 1, 2008 respectively.
The Company is subject to ongoing examination by tax
authorities in the jurisdictions in which it operates. A summary
of open tax years by major jurisdiction is presented below:
Jurisdiction
Canada (1) Fiscal 2001 - 2008
United States (1) Fiscal 2003 - 2008
United Kingdom Fiscal 2002 - 2008
(1) Includes federal as well as provincial and state jurisdictions, as
applicable.
The Company regularly assesses the status of these
examinations and the potential for adverse outcomes to
determine the adequacy of the provision for income taxes.
Specifically, the Canada Revenue Agency (“CRA”) is currently
examining the Company’s fiscal 2001-2005 Canadian
corporate tax filings. The Company expects the CRA to
conclude its examination in fiscal 2009. The CRA has also
given the Company notice that it will begin examining the
Company’s fiscal 2006 and fiscal 2007 Canadian corporate tax
filings in fiscal 2009. The Company has other non-Canadian
income tax audits pending. While the final resolution of
these audits is uncertain, the Company believes the ultimate
resolution of these audits will not have a material adverse
effect on its consolidated financial position, liquidity or results
of operations. The Company believes it is reasonably possible
that approximately $8.9 million of its gross unrecognized tax
benefit will decrease during fiscal 2009.
The Company recognizes interest and penalties related
to unrecognized tax benefits as interest expense that is
netted and reported within Investment income. The amount
of interest and penalties accrued as at March 1, 2008 and
the adoption date is approximately $4.4 million and nil
respectively.