Blackberry 2011 Annual Report Download - page 71

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The contractual maturities of available-for-sale investments at February 26, 2011 were as follows:
Cost Basis Fair Value
Due in one year or less $1,813 $1,813
Due in one to five years 462 467
Due after five years 59 59
No fixed maturity date 45 45
$2,379 $2,384
As at February 26, 2011, the Company had no investments with continuous unrealized losses. As at February 27, 2010,
investments with continuous unrealized losses for less than 12 months and greater than 12 months and their related fair values were
as follows:
As at February 27, 2010 Fair Value
Unrealized
Losses Fair Value
Unrealized
Losses Fair Value
Unrealized
Losses
Less than 12 months 12 months or greater Total
Auction-rate securities $– $– $33 $8 $33 $8
$– $– $33 $8 $33 $8
During fiscal 2011, the Company recognized an other-than-temporary impairment charge on its auction rate securities in the
amount of $6 million as a result of the lack of continuing liquidity in these securities. 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. 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 consolidated balance sheet as at February 26, 2011.
During fiscal 2011, the Company also recognized an other-than-temporary impairment charge of $11 million against a portion of its
claim on Lehman Brothers International (Europe) (“LBIE”) trust assets. These assets are represented by principal and interest payments
from matured investments that were originally held at LBIE at the time of bankruptcy. The Company has classified $25 million of these
holdings as other investments on the consolidated balance sheet as at February 26, 2011. Previously, these holdings were classified as
bank balances on the consolidated balance sheet as at February 27, 2010. The classification change is represented in the consolidated
statement of cash flows for the year ended February 26, 2011 as an acquisition of long-term investments.
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.
• Level 2 – Observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and
liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other
inputs that are observable or can be corroborated by observable market data.
• Level 3 – Significant unobservable inputs which are supported by little or no market activity.
The fair value hierarchy also requires the Company to maximize the use of observable inputs and minimize the use of unobservable
inputs when measuring fair value.
58 RESEARCH IN MOTION ANNUAL REPORT 2011
RESEARCH IN MOTION LIMITED
Notes to the Consolidated Financial Statements
continued
In millions of United States dollars, except share and per share data, and except as otherwise indicated