Blackberry 2001 Annual Report Download - page 34

Research In Motion Limited >Incorporated Under the Laws of Ontario >United States dollars, in thousands except per share data
The Company mitigates this risk in part by maintaining Canadian dollar funds. The Company also utilizes certain
financial instruments to manage the risk associated with fluctuations in foreign exchange rates. As at February
28, 2001 the Company has entered into foreign exchange contracts, which have been designated as hedge
instruments, to sell U.S. dollars and purchase Canadian dollars with an aggregate value amount of U.S. $44.5
million (2000–nil). These contracts mature at varying dates with the latest being February 22, 2002. Gains
and losses on these hedging instruments are recognized in the same period as, and as part of, the hedged
transaction. There was no significant unrealized gain or loss on these contracts as at February 28, 2001.
Marketable securities are subject to market risk in that their value will fluctuate as a result of changes in market
prices. In order to reduce credit risk, the Company has invested only in securities of investment grade. Marketable
securities from one issuer comprised 14% (2000 – one issuer comprised 34%) of the total marketable securities.
The Company, in the normal course of business, monitors the financial condition of its customers and reviews
the credit history of each new customer. The Company establishes an allowance for doubtful accounts that
corresponds to the specific credit risk of its customers, historical trends and economic circumstances. The
allowance as at February 28, 2001 is $4,976 (2000–$64).
While the Company sells to a variety of customers, one customer comprised 25% of trade receivables as at
February 28, 2001 (2000 – two customers, 46% and 18%). Additionally, 18% of the Company’s sales were to
one customer (2000 – two customers, 31% and 25%).
For certain of the Company’s financial instruments, including trade receivables, other receivables, accounts
payable and accrued liabilities, the carrying amounts approximate their respective fair values due to their short
maturities. Cash and cash equivalents, marketable securities and long-term debt are carried at cost, which
approximates their respective fair values.
15. Segment Disclosures
The Company is organized and managed as a single reportable business segment. The Company’s operations are
substantially all related to the research, design, manufacture and sales of wireless data communications products.
Operations include the manufacture of radios and other network access devices for the original equipment
manufacturers as well as wireless products for the aftermarket. Substantially all revenue is derived from sales to
customers in the United States. 8% of sales are to customers outside of the United States (2000 –7%).
Financial information on the Company’s geographic areas is as follows:
February 28, 2001 February 29, 2000 February 28, 1999
Sales
Canada $ 16,721 $ 6,187 $ 3,246
United States 204,606 78,780 44,096
$ 221,327 $ 84,967 $ 47,342
Total Assets
Canada $ 246,446 $ 337,227
United States 717,744 –
United Kingdom 5,873 –
$ 970,063 $ 337,227
16. Comparative Figures
Certain of the prior years’figures have been reclassified for consistency with the current presentation.
The Company historically measured and presented its financial statements in Canadian dollars. Effective
September 1, 1999, as a result of the Company’s increased economic activity in the United States, the U.S.
dollar became the functional currency of the Company’s operations and for the financial statements of the
Company. Effective the same date, the U.S. dollar was adopted as the reporting currency.
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