Blackberry 2012 Annual Report Download - page 164

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
option contracts to hedge portions of these anticipated transactions to reduce the volatility on income associated with the foreign
currency exposures. The Company also enters into forward and option contracts to reduce the effects of foreign exchange gains
and losses resulting from the revaluation of certain foreign currency monetary assets and liabilities. At March 3, 2012
approximately 38% of cash and cash equivalents, 30% of accounts receivables and 11% of accounts payable and accrued
liabilities are denominated in foreign currencies (February 26, 2011 – 59%, 25% and 8%).
The Company enters into forward and option contracts to hedge exposures relating to foreign currency anticipated transactions.
These contracts have been designated as cash flow hedges, with the effective portion of the change in fair value initially
recorded in accumulated other comprehensive income and subsequently reclassified to income in the period in which the cash
flows from the associated hedged transactions affect income. Any ineffective portion of the change in fair value of the cash flow
hedge is recognized in current period income. For the years ended March 3, 2012 and February 26, 2011, there was $2 million
and nil in realized losses on forward contracts which were ineffective upon maturity as the anticipated hedged transactions did
not occur. As at March 3, 2012 and February 26, 2011, the derivatives designated as cash flow hedges were considered to be
fully effective with no resulting portions being designated as ineffective. The maturity dates of these instruments range from
March 2012 to September 2013. As at March 3, 2012, the net unrealized gains on these forward and option contracts was $51
million (February 26, 2011 – net unrealized losses of $21 million; February 27, 2010 – net unrealized gains of $62 million).
Unrealized gains associated with these contracts were recorded in other current assets and accumulated other comprehensive
income. Unrealized losses were recorded in accrued liabilities and accumulated other comprehensive income. In fiscal 2013, $46
million of net unrealized gains on these derivative contracts will be reclassified to income.
The following table shows the fair values of derivative instruments designated as cash flow hedges in the consolidated balance
sheets:
43
As at
March 3, 2012 February 26, 2011
Balance Sheet
Classification Fair Value
Balance Sheet
Classification Fair Valu
e
Currency forward contracts - asset
Other current assets $42 Other current assets $57
Currenc
y
o
p
tion contracts - asset Other current assets $17 Other current assets $1
Currenc
y
forward contracts - liabilit
y
Accrued liabilities $ 6 Accrued liabilities $77
Currenc
y
o
p
tion contracts - liabilit
y
Accrued liabilities $1 Accrued liabilities $1