Blackberry 2012 Annual Report Download - page 82

There has also been public speculation about possible health risks to individuals from exposure to electromagnetic fields or radio
frequency energy from the use of mobile devices. Government agencies, international health organizations, industry associations and
other scientific bodies continue to conduct research on the topic, and there can be no assurance that future studies, irrespective of their
scientific basis, will not suggest a link between electromagnetic fields from mobile devices and adverse health effects. Mobile device
manufacturers and cellular services providers have been named in lawsuits alleging that the use of mobile devices poses a risk to
human health and that radio emissions have caused or contributed to the development of brain tumors. Other users of mobile devices
with multimedia functions, such as MP3 players, have claimed that the use of such products has contributed to or resulted in hearing
loss or other adverse health effects. In addition, users of the Company’s products who disregard the Company’s warnings about using
the products while operating a motor vehicle or who use after-market accessories, such as batteries, that are not subject to the
Company’s quality control procedures may also be at risk of bodily harm. The perception of risk to human health or other risks could
adversely affect the demand for the Company’s products and allegations of risks relating to the Company’s products could result in
litigation, which could distract management or result in liabilities for the Company, regardless of the merit of such claims.
In addition, alleged or actual non-compliance with local laws could result in the suspension of sales, importation licenses or services
in certain jurisdictions where the Company’s products are currently sold or used.
The Company’s worldwide operations subject it to income and other taxes in many jurisdictions, and the Company must
exercise significant judgment in order to estimate its worldwide financial provision for income taxes. There can be no
assurances that the Company’s historical provisions and accruals for income and other taxes will be adequate.
The Company is subject to income and other taxes in Canada and numerous foreign jurisdictions. Significant judgment is required in
determining its worldwide liability for income and other taxes. In the ordinary course of the Company’s business, there are many
transactions and calculations where the ultimate tax determination is uncertain. Although the Company believes that its tax estimates
are reasonable, there can be no assurances that the final determination of any tax audits will not be materially different from that
which is reflected in historical income and other tax provisions and accruals. Should additional taxes be assessed as a result of an
audit, litigation or changes in tax laws, there could be a material adverse effect on the Company’s current and future results and
financial condition. In addition, there is a risk of recoverability of future deferred tax assets.
The Company’s future effective tax rate will depend on the relative profitability of the Company’s domestic and foreign operations,
the statutory tax rates and taxation laws of the related tax jurisdictions, the tax treaties between the countries in which the Company
operates, the timing of the release, if any, of the valuation allowance, and the relative proportion of research and development
incentives to the Company’s profitability.
A significant portion of the Company’s assets are held in cash, cash equivalents, short-term or long-term investments, all
of which are subject to market and credit risk.
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