Blackberry 2016 Annual Report Download - page 104

BlackBerry Limited
Notes to the Consolidated Financial Statements
In millions of United States dollars, except share and per share data, and except as otherwise indicated
36
The effects on net income of amounts reclassified from AOCI into income by component for the year ended February 29,
2016 were as follows:
Location of loss reclassified from AOCI into income Gains and Losses on Cash Flow Hedges
Gains and Losses on
Available-for-Sale
Securities Total
Selling, marketing and administration $(30) $ — $ (30)
Investment income — 1 1
Recovery of income taxes 2 — 2
Total amount reclassified into income, net of tax $(28) $ 1 $ (27)
14. COMMITMENTS AND CONTINGENCIES
(a) Credit facility and letters of credit
The Company has $44 million in collateralized outstanding letters of credit in support of certain leasing arrangements
entered into in the ordinary course of business. See the discussion of restricted cash in Note 3.
(b) Lease commitments
The Company is committed to future minimum annual lease payments related to real estate operating leases as follows:
For the fiscal years ending:
2017 $ 37
2018 28
2019 23
2020 13
2021 8
Thereafter 7
$ 116
For the year ended February 29, 2016, the Company incurred rental expense of $45 million (February 28, 2015 - $60
million; March 1, 2014 - $80 million).
(c) Litigation
The Company is involved in litigation in the normal course of its business, both as a defendant and as a plaintiff. The
Company is subject to a variety of claims (including claims related to patent infringement, purported class actions and
other claims in the normal course of business) and may be subject to additional claims either directly or through
indemnities against claims that it provides to certain of its partners and customers. In particular, the industry in which the
Company competes has many participants that own, or claim to own, intellectual property, including participants that have
been issued patents and may have filed patent applications or may obtain additional patents and proprietary rights for
technologies similar to those used by the Company in its products. The Company has received, and may receive in the
future, assertions and claims from third parties that the Company’s products infringe on their patents or other intellectual
property rights. Litigation has been, and will likely continue to be, necessary to determine the scope, enforceability and
validity of third-party proprietary rights or to establish the Company’s proprietary rights. Regardless of whether claims
against the Company have merit, those claims could be time-consuming to evaluate and defend, result in costly litigation,
divert management’s attention and resources, subject the Company to significant liabilities and could have the other
effects that are described in greater detail under “Risk Factors” in the Company’s unaudited Annual Information Form for
the fiscal year ended February 29, 2016, which is included in the Company’s Annual Report on Form 40-F, including the
risk factors entitled “Litigation against the Company may result in adverse outcomes” and “The Company could be found
to have infringed on the intellectual property rights of others”.
Management reviews all of the relevant facts for each claim and applies judgment in evaluating the likelihood and, if
applicable, the amount of any potential loss. Where a potential loss is considered probable and the amount is reasonably
estimable, provisions for loss are made based on management’s assessment of the likely outcome. Where a range of loss
can be reasonably estimated with no best estimate in the range, the Company records the minimum amount in the range.