Blackberry 2009 Annual Report Download - page 45

43
2009. The Company believes its financial resources, together
with expected future earnings, are sufficient to meet funding
requirements for current financial commitments, for future
operating and capital expenditures not yet committed, and
also provide the necessary financial capacity to meet current
and future growth expectations.
The Company has a $100 million Demand Credit Facility
(the “Facility”) to support and secure operating and financing
requirements. As at February 28, 2009, the Company has
utilized $6.5 million of the Facility for outstanding Letters of
Credit and $93.5 million of the Facility is unused. The Company
has pledged specific investments as security for this Facility.
The Company has an additional $2.0 million Demand
Credit Facility (the “Additional Facility”). The Additional
Facility is used to support and secure other operating
and financing requirements. As at February 28, 2009, the
Company has utilized $1.1 million of the Additional Facility for
outstanding letters of credit and $0.9 million of the Additional
Facility is unused.
The Company does not have any off-balance sheet
arrangements as defined in Item 303(a)(4)(ii) of Regulation
S-K under the Exchange Act and under applicable Canadian
securities laws.
Market Risk of Financial Instruments
The Company is engaged in operating and financing
activities that generate risk in three primary areas:
Foreign Exchange
The Company is exposed to foreign exchange risk as a
result of transactions in currencies other than its functional
currency, the U.S. dollar. The majority of the Company’s
revenues in fiscal 2009 are transacted in U.S. dollars. Portions
of the revenues are denominated in British Pounds, Canadian
dollars and Euros. Purchases of raw materials are primarily
transacted in U.S. dollars. Other expenses, consisting of
the majority of salaries and income taxes, certain operating
costs and manufacturing overhead are incurred primarily
Aggregate Contractual Obligations
The following table sets out aggregate information about the
Company’s contractual obligations and the periods in which
payments are due as at February 28, 2009:
(in thousands)
Total Less than One Year One to Three Years Four to Five Years Greater than Five Years
Operating lease obligations $183,380 $ 25,244 $ 66,468 $ 36,547 $ 55,121
Purchase obligations and commitments 4,228,407 4,228,407 - - -
Total $4,411,787 $ 4,253,651 $ 66,468 $ 36,547 $ 55,121
Purchase obligations and commitments amounted to
approximately $4.23 billion as of February 28, 2009, with
purchase orders with contract manufacturers representing
approximately $3.48 billion of the total. The Company also
has commitments on account of capital expenditures of
approximately $128.4 million included in this total, primarily
for manufacturing, facilities and information technology,
including service operations. The remaining balance consists
of purchase orders or contracts with suppliers of raw
materials, as well as other goods and services utilized in the
operations of the Company. The expected timing of payment
of these purchase obligations and commitments is estimated
based upon current information. The timing of payments and
actual amounts paid may be different depending upon the
time of receipt of goods and services, changes to agreed-
upon amounts for some obligations or payment terms.
On February 10, 2009, the Company entered into an
agreement with Certicom Corp. (“Certicom”) to acquire all
of the issued and outstanding common shares of Certicom
by way of statutory plan of arrangement at a price of CAD
$3.00 for each common share of Certicom or approximately
CAD $131 million (approximately $102 million). The transaction
closed on March 23, 2009. The Certicom shares purchased
under the offer were funded with the Company’s cash on hand.
The Company has obligations payable in the first quarter
of fiscal 2010 of approximately $290 million for the payment
of income taxes related to fiscal 2009. The Company paid
approximately $475 million in the first quarter of fiscal
2009 in respect of income taxes related to fiscal 2008. The
amounts have been included as Current liabilities in Income
taxes payable as of February 28, 2009 and March 1, 2008
respectively, and the Company intends to fund its fiscal 2009
tax obligations from existing financial resources and cash
flows.
The Company has not paid any cash dividends in the last
three fiscal years.
Cash and cash equivalents, short-term investments and
long-term investments were $2.24 billion as at February 28,