Blackberry 2003 Annual Report Download - page 13
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Please find page 13 of the 2003 Blackberry annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.ResearchInMotionLimited|IncorporatedUndertheLawsofOntario(UnitedStatesdollars,inthousandsexceptpersharedataorasotherwiseindicated)
FortheyearsendedMarch1,2003,March2,2002andFebruary28,2001
11
determinedthatitisnolongerabletosatisfythe“morelikelythannot”standardunderGAAPwithrespect
tothevaluationofitsfutureincometaxassetbalanceandhasrecordedafullvaluationallowanceagainst
theentirefuturetaxassetbalance.ShouldRIMdeterminethatitisabletorealizeitsfuturetaxassetsin
thefutureinexcessofitsnetrecordedamount,netincomewouldincreaseinthereportingperiodsuch
determinationismade.
Litigation
TheCompanyiscurrentlyinvolvedincertainlegalproceedings,includingpatentlitigationwhereitis
seekingtoprotectitspatents(seenote11(b))andwhereitisseekingtodefenditselfinapatentinfringe-
mentsuit(the“NTPmatter”–seenote14).RIMhasrecordedliabilitiesfortheestimatedprobablecosts
fortheresolutionoftheNTPmatter,baseduponCourtrulingstodateandtheCompany’scurrentand
estimatedfuturecostswithrespecttoongoinglegalfees,inaccordancewithCanadianandU.S.GAAPfor
“Contingencies”.Theseestimateshavebeendevelopedinconsultationwithlegalcounselhandlingthe
defenceofthismatter.TheactualresolutionoftheNTPmattermaydiffermateriallyfromtheseestimates
asatMarch1,2003bothasaresultoffuturerulingsissuedbythecourtcurrentlyadjudicatingthematter
andalsobytheappellatecourtsattheconclusionoftheappealsprocess;potentiallycausingfuture
quarterlyorannualnancialreportingtobemateriallyaffected,eitheradverselyorfavourably.
Warranty
TheCompanyprovidesfortheestimatedcostsofproductwarrantiesatthetimerevenueisrecognized;
handheldproductsaregenerallycoveredbyatimelimitedwarrantyforvaryingfutureperiods.The
Company’swarrantyobligationisaffectedbyproductfailurerates,materialusageandservicedelivery
costs.TheCompany’sestimatesofcostsarebaseduponhistoricalexperienceandexpectationsoffuture
conditions.TotheextentthattheCompanyexperiencesincreasedwarrantyactivityorincreasedcosts
associatedwithservicingthoseobligations,revisionstotheestimatedwarrantyliabilitywouldberequired.
Costmethodforlong-termportfolioinvestments
Allinvestmentswithmaturitiesinexcessofoneyearareclassiedaslong-termportfolioinvestmentsand
arecarriedatcost.TheCompanydoesnotexercisesignicantinuencewithrespecttoanyoftheseinvest-
ments.Intheeventthatadeclineinthefairvalueofaninvestmentoccurs,managementmayberequired
todetermineifthedeclineisotherthantemporary.Ifthefairvalueislessthanthecarryingvalueandthe
declineinvalueisconsideredtobeotherthantemporary,anappropriatewrite-downwouldberecorded.
ResultsofOperations
YearendedMarch1,2003comparedtotheyearendedMarch2,2002
Revenuefortheyearincreasedto$306.7millionfrom$294.1millioninthepreviousyear.BlackBerrywas
themainrevenuedriver.TheCompanyanticipatesthatitsBlackBerrysolutionwillcontinuetodrivethe
Company’sfuturerevenuegrowththroughthesaleofhandheldsandserviceandthroughthelicensing
ofsoftware.
Highlightsforscal2003:
• TheBlackBerrysubscriberbasegrewtoapproximately534,000users.
• LaunchedtheBlackBerry6510handheldwhichoperatesonNextel’siDENnetworkintheUnitedStates.
TheBlackBerry6510handheldcombinesemail,digitalcellularphone,DirectConnect,webandorganizer
applicationsinasinglewirelesshandheld.
• LaunchedBlackBerry6710andBlackBerry6720handhelds.TheBlackBerry6710isaworldband
handheldsupportingseamlessoperationonGSM/GPRSnetworksinNorthAmerica,Europeand
AsiaPacic(900/1900MHzfrequencies).TheBlackBerry6720isadualbandhandheldoperatingon
GSM/GPRSnetworks(900/1800MHzfrequencies)andallowsmobileprofessionalstotravelinEurope
andAsiaPacicwithonehandheld.
• LaunchedBlackBerry6750handhelds.TheBlackBerry6750isadataandvoice-enabledhandheldthat
operatesonCDMA20001XwirelessnetworksinNorthAmerica.
• LaunchedBlackBerryEnterpriseServerv3.6toprovideaddedfunctionalitytotheCompany’scorporate
userbase.