Blackberry 2012 Annual Report Download - page 150

Research In Motion Limited
Notes to the Consolidated Financial Statements
In millions of United States dollars, except share and per share data, and except as otherwise indicated
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 March 3, 2012 (February 26, 2011 - 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 March 3, 2012 and February 26, 2011 were $146 million and $164
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:
As at March 3, 2012, the total unrecognized income tax benefits of $146 million include approximately $121 million of
unrecognized income tax benefits that have been netted against related deferred income tax assets. The remaining $25 million is
recorded within current income taxes payable and other non-current taxes payable on the Company’s consolidated balance sheet
as of March 3, 2012.
A summary of open tax years by major jurisdiction is presented below:
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”) recently concluded its examination of the Company’s fiscal
2006 to fiscal 2009 Canadian corporate tax filings. Although the audit concluded with no material adjustments to income taxes
payable, there remains uncertainty with respect to certain tax attributes that have resulted from the restructuring of RIM’s
international operations. The Company believes it is reasonably possible that approximately $142 million of its gross
unrecognized income tax benefit will decrease in the next twelve months, the majority of which relates to the tax attributes
resulting from the restructuring of RIM’s international operations. 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.
29
(in millions)
Unrecognized income tax benefits balance as at February 26, 2011
$164
Increase for tax
p
ositions of
p
rior
y
ears 15
Settlement of tax
p
ositions (8)
Ex
p
iration of statute of limitations (24)
Other (1)
Unreco
g
nized income tax benefits balance as at March 3, 2012 $146
Canada Fiscal 2006 - 2012
United States
Fiscal 2009 - 2012
United Kin
g
dom Fiscal 2010 - 2012
(1) Includes federal as well as
p
rovincial and state
j
urisdictions, as a
pp
licable.
(1)
(1)