Blackberry 2010 Annual Report Download - page 76

Investments with continuous unrealized losses for less than 12 months and greater than 12 months and their related fair
values were as follows:
Fair Value
Unrealized
losses Fair Value
Unrealized
losses Fair Value
Unrealized
losses
Less than 12 months 12 months or greater Total
As at February 27, 2010
Commercial paper and corporate notes/bonds ......... $ 93,129 $ 49 $ – $ – $ 93,129 $ 49
Treasury bills/notes ................................................... 91,109 12 – – 91,109 12
Government sponsored enterprise notes .. .................. 57,537 13 – – 57,537 13
Asset-backed securities ............................................. 18,820 50 – – 18,820 50
Auction-rate securities................................................ – – 32,839 7,688 32,839 7,688
$ 260,595 $ 124 $ 32,839 $ 7,688 $ 293,434 $ 7,812
Fair Value
Unrealized
losses Fair Value
Unrealized
losses Fair Value
Unrealized
losses
Less than 12 months 12 months or greater Total
As at February 28, 2009
Commercial paper and corporate notes/bonds ......... $ 81,077 $ 391 $ 19,997 $ 52 $ 101,074 $ 443
Treasury bills/notes ................................................... 130,713 153 – – 130,713 153
Government sponsored enterprise notes .. .................. 231,955 178 – – 231,955 178
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
Unrealized losses of $7.7 million primarily relate to auction-rate securities. 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 27, 2010, the Company held
$40.5 million in face value of investment grade auction rate securities which 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. The Company has adjusted the reported value to reflect an unrealized loss of $7.7 million in
fiscal 2009, which the Company considers temporary and is reflected in accumulated other comprehensive income (loss).
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 failing auction rate securities as long-term investments on
the balance sheet. As at February 27, 2010, the Company does not consider these investments to be other-than-temporarily
impaired.
5. FAIR VALUE MEASUREMENTS
The Company defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an
orderly transaction between market participants at the measurement date. When determining the fair value measurements
for assets and liabilities required to be recorded at fair value, the Company considers the principal or most advantageous
market in which it would transact and considers assumptions that market participants would use in pricing the asset or
liability such as inherent risk, non-performance risk and credit risk. The Company applies the following fair value
hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value into three levels:
• Level 1 — Unadjusted quoted prices at the measurement date for identical assets or liabilities in active markets.
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
NOTES 4  5
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