Blackberry 2009 Annual Report Download - page 63

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Investments with continuous unrealized losses for less than
and greater than 12 months and their related fair values were
as follows:
Less than 12 months 12 months or more Total
Fair Value Unrealized losses Fair Value Unrealized losses Fair Value Unrealized losses
As at February 28, 2009
Government sponsored enterprise notes $ 231,955 $ 178 $ - $ - $ 231,955 $ 178
Commercial paper and corporate bonds 81,077 391 19,997 52 101,074 443
U.S. treasury notes 130,713 153 - - 130,713 153
Asset-backed securities 125,019 1,540 - - 125,019 1,540
Auction-rate securities - - 32,842 7,687 32,842 7,687
$ 568,764 $ 2,262 $ 52,839 $ 7,739 $ 621,603 $ 10,001
Less than 12 months 12 months or more Total
Fair Value Unrealized losses Fair Value Unrealized losses Fair Value Unrealized losses
As at March 1, 2008
Government sponsored enterprise notes $ 11,520 $ 67 $ - $ - $ 11,520 $ 67
Commercial paper and corporate bonds 199,726 36 10,648 18 210,374 54
Asset-backed securities 6,820 2 6,694 12 13,514 14
Auction-rate securities 37,326 3,230 - - 37,326 3,230
Bank certificates of deposit 30,175 2 - - 30,175 2
$ 285,567 $ 3,337 $ 17,342 $ 30 $ 302,909 $ 3,367
Auction-rate securities account for $7.7 million of the total
$10.0 million unrealized losses. Auction-rate securities are
debt instruments with long-term nominal maturity dates for
which the interest rates are reset through a dutch auction
process, typically every 7, 28 or 35 days. Interest is paid at the
end of each auction period and the auction normally serves
as the mechanism for securities holders to sell their existing
positions to interested buyers. As at February 28, 2009, the
Company held $40.5 million in face value of auction rate
securities that are experiencing failed auctions as a result of
more sell orders than buy orders and these auctions have
not yet returned to normal operations. The interest rate for
these securities has been set at the maximum rate specified
in the program documents and interest continues to be
paid every 28 days as scheduled. As a result of the lack of
continuing liquidity in these securities, the Company has
adjusted the reported value to reflect an unrealized loss of
$7.7 million, which the Company considers temporary and is
reflected in other comprehensive income. In valuing these
securities, the Company used a multi-year investment horizon
and considered the underlying risk of the securities and the
current market interest rate environment. The Company has
the ability and intent to hold these securities until such time
that market liquidity returns to normal levels and does not
consider the principal or interest amounts on these securities
to be materially at risk at this time. As there is uncertainty
as to when market liquidity for auction-rate securities will
return to normal, the Company has classified the auction-rate
securities as long-term investments on the balance sheet. As
at February 28, 2009, the Company does not consider these
long-term investments to be other-than-temporarily impaired.
The additional unrealized losses of $2.3 million for
investment grade debt securities were related to changes in
interest rates and overall market conditions. The Company
believes that it is probable that it will be able to collect all
amounts due according to the contractual terms of the
investments. The Company has the ability and intent to
hold these investments until there is a recovery of fair value
which may be at maturity. As a result, the Company does
not consider these investments to be other-than-temporarily
impaired as at February 28, 2009.