Blackberry 2011 Annual Report Download - page 81

The Company determined that it is more likely than not that it can realize its deferred income tax assets. Accordingly, no valuation
allowance is required on its deferred income tax assets as at February 26, 2011 (February 27, 2010 — nil). The Company will continue
to evaluate and examine the valuation allowance on a regular basis, and when required, the valuation allowance may be adjusted.
The Company has not provided for Canadian deferred income taxes or foreign withholding taxes that would apply on the distribution
of the income of its non-Canadian subsidiaries, as this income is intended to be reinvested indefinitely.
The Company’s total unrecognized income tax benefits as at February 26, 2011 and February 27, 2010 were $164 million and
$161 million respectively. A reconciliation of the beginning and ending amount of unrecognized income tax benefits that, if recognized,
would affect the Company’s effective tax rate is as follows:
(in millions)
Unrecognized income tax benefits balance as at February 27, 2010 $161
Foreign exchange 4
Increase for tax positions of prior years 8
Settlement of tax positions (2)
Other (7)
Unrecognized income tax benefits balance as at February 26, 2011 $164
As at February 26, 2011, the total unrecognized income tax benefits of $164 million include approximately $111 million of
unrecognized income tax benefits that have been netted against related deferred income tax assets. The remaining $53 million is
recorded within current taxes payable and other non-current taxes payable on the Company’s consolidated balance sheet as of
February 26, 2011.
A summary of open tax years by major jurisdiction is presented below:
Canada
(1)
Fiscal 2003-2011
United States
(1)
Fiscal 2008-2011
United Kingdom Fiscal 2009-2011
(1) Includes federal as well as provincial and state jurisdictions, as applicable.
The Company is subject to ongoing examination by tax authorities in the jurisdictions in which it operates. 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. The Canada Revenue Agency (“CRA”) is currently examining the Company’s fiscal 2006 to fiscal 2009 Canadian
corporate tax filings. 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 million of its
gross unrecognized income tax benefit will decrease in the next twelve months.
The Company recognizes interest and penalties related to unrecognized income tax benefits as interest expense that is netted and
reported within investment income. The amount of interest accrued as at February 26, 2011 was approximately $12 million
(February 27, 2010 — approximately $9 million). The amount of penalties accrued as at February 26, 2011 was nil (February 27,
2010 — nil).
9. CAPITAL STOCK
(a) Capital stock
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. At
February 26, 2011 and February 27, 2010, there were no Class A common shares or preferred shares outstanding.
68 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