Blackberry 2016 Annual Report Download - page 85

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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
17
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. As at
February 29, 2016, approximately 10% of cash and cash equivalents, 30% of accounts receivable and 16% of accounts
payable and accrued liabilities are denominated in foreign currencies (February 28, 2015 – 26%, 30% and 13%,
respectively).
Please see “Derivative financial instruments” in Note 1 for the Company’s accounting policies on these instruments.
As at February 29, 2016 and February 28, 2015, the outstanding derivatives designated as cash flow hedges were
considered to be fully effective. The maturity dates of these instruments range from March 2016 to July 2016. As at
February 29, 2016, the net unrealized loss on these forward and option contracts (including option premiums paid) was $1
million (February 28, 2015 - net unrealized loss of $26 million). Unrealized gains associated with these contracts were
recorded in other current assets and AOCI. Unrealized losses were recorded in accrued liabilities and AOCI. Option
premiums were recorded in AOCI. As at February 29, 2016, the Company estimates that approximately $1 million of net
unrealized losses, including option premiums on these forward and option contracts, will be reclassified into income
within the next 12 months. For the fiscal years ended February 29, 2016 and February 28, 2015, there were no realized
gains or losses on forward contracts which were ineffective upon maturity.
The following table shows the impact of derivative instruments designated as cash flow hedges on the consolidated
statements of operations and the consolidated statements of comprehensive loss for the year ended February 29, 2016:
Amount of Gain (Loss)
Recognized in Other
Comprehensive Income on
Derivative Instruments
(Effective Portion)
Location of Gain (Loss) Reclassified
from AOCI into Income
(Effective Portion)
Amount of Gain (Loss)
Reclassified from
AOCI into Income
(Effective Portion)
Currency forward contracts $ — Selling, marketing and administration $ (20)
Currency option contracts (1) Selling, marketing and administration (10)
Total $ (1) $ (30)
The following table shows the impact of derivative instruments designated as cash flow hedges on the consolidated
statements of operations and the consolidated statements of comprehensive loss for the year ended February 28, 2015:
Amount of Gain (Loss)
Recognized in Other
Comprehensive Income on
Derivative Instruments
(Effective Portion)
Location of Gain (Loss) Reclassified
from AOCI into Income
(Effective Portion)
Amount of Gain (Loss)
Reclassified from
AOCI into Income
(Effective Portion)
Currency forward contracts $ (2) Cost of sales $ (1)
Currency option contracts (1) Cost of sales (1)
Currency forward contracts (3) Selling, marketing and administration (5)
Currency option contracts (7) Selling, marketing and administration (4)
Currency forward contracts (8) Research and development (3)
Currency option contracts (5) Research and development (1)
Total $ (26) $ (15)
The Company has also occasionally entered into other forward and option contracts hedging anticipated foreign currency
transactions which it did not designate as cash flow hedges. Any realized and unrealized gains and losses on these
contracts are recognized in income each period. As at February 29, 2016, there were no unrealized gains or losses
recorded in respect of these instruments (February 28, 2015 - unrealized gains of $25 million). Unrealized gains
associated with these contracts were recorded in other current assets and selling, marketing and administration expenses.
Unrealized losses were recorded in accrued liabilities and selling, marketing and administration expenses.
As part of its currency risk management strategy, the Company may maintain net monetary asset and/or liability balances
in foreign currencies. The Company enters into foreign exchange forward contracts to hedge certain monetary assets and
liabilities that are exposed to foreign currency risk. The principal currencies hedged include the Canadian dollar, Euro,
and British pound. These contracts are not subject to hedge accounting, and any realized and unrealized gains or losses are
recognized in income each period, offsetting the change in the U.S. dollar value of the asset or liability. The maturity dates
of these instruments range from March 2016 to June 2016. As at February 29, 2016, net unrealized gains (net of premium