Blackberry 2003 Annual Report Download - page 23

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Research฀In฀Motion฀Limited฀฀|฀฀Incorporated฀Under฀the฀Laws฀of฀Ontario฀(United฀States฀dollars,฀in฀thousands฀except฀per฀share฀data฀or฀as฀otherwise฀indicated)
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For฀the฀years฀ended฀March฀1,฀2003,฀March฀2,฀2002฀and฀February฀28,฀2001
Cash฀ows฀used฀in฀investing฀activities,฀net฀of฀the฀net฀decrease฀in฀marketable฀securities฀of฀$304.1฀million,฀
were฀$282.7฀million฀for฀the฀year฀ended฀March฀1,฀2003,฀which฀included฀the฀acquisition฀of฀long-term฀
portfolio฀investments฀of฀$190.0฀million,฀capital฀and฀intangible฀asset฀expenditures฀of฀$39.7฀million฀and฀
$31.0฀million฀respectively฀and฀the฀acquisition฀of฀subsidiaries฀for฀cash฀consideration฀of฀$22.0฀million.฀Cash฀
ows฀used฀in฀investing฀activities฀were฀$181.7฀million฀for฀the฀year฀ended฀March฀2,฀2002,฀which฀included฀
capital฀and฀intangible฀asset฀expenditures฀of฀$73.9฀million฀and฀$7.1฀million฀respectively,฀the฀acquisition฀of฀
a฀subsidiary฀for฀the฀net฀cash฀consideration฀portion฀of฀$9.7฀million฀and฀the฀net฀acquisition฀of฀marketable฀
securities฀of฀$91.0฀million.
Cash,฀cash฀equivalents฀and฀marketable฀securities฀decreased฀by฀$113.8฀million฀to฀$530.7฀million฀as฀
at฀March฀1,฀2003฀from฀$644.6฀million฀as฀at฀March฀2,฀2002.฀A฀comparative฀summary฀is฀set฀out฀below.
As฀At฀฀ March฀1,฀2003฀ March฀2,฀2002฀ Change
Cash฀and฀cash฀equivalents฀ $฀ 340,681฀ $฀ 340,476฀ $฀ 205
Marketable฀securities฀ ฀ ฀ –฀ ฀ 304,083฀ ฀ (304,083)
Long-term฀portfolio฀investments฀ ฀ 190,030฀ ฀ –฀ ฀ 190,030
Cash,฀cash฀equivalents฀and฀marketable฀securities฀ $฀ 530,711฀ $฀ 644,559฀ $฀ (113,848)
Trending฀into฀Fiscal฀2004
The฀Company฀has฀$340.7฀million฀available฀in฀cash฀and฀cash฀equivalents.฀This฀is฀adequate฀to฀meet฀the฀
Company’s฀operations฀for฀scal฀2004.฀
The฀Company฀is฀required฀to฀deposit฀the฀future฀NTP฀compensatory฀damages฀amounts฀into฀a฀bank฀
escrow฀account฀on฀a฀quarterly฀basis,฀subsequent฀to฀the฀end฀of฀each฀scal฀quarter.฀The฀quarterly฀
deposit฀is฀currently฀8.55%฀of฀infringing฀revenues฀and฀will฀be฀set฀aside฀in฀escrow฀until฀the฀appeals฀
process฀is฀complete.
Aggregate฀Contractual฀Obligations฀
As฀at฀March฀1,฀2003฀the฀Company’s฀contractual฀obligations,฀including฀payments฀due฀by฀period,฀
are฀as฀follows:
฀ ฀ ฀ ฀ ฀ ฀ ฀ ฀ 2008฀and
฀ ฀ ฀ Total฀ 2004฀ 2005฀ 2006฀ 2007฀ ฀Thereafter
Current฀maturities฀
฀ of฀long-term฀debt฀ ฀ $฀ 6,143฀ $฀ 6,143฀ $฀ –฀ $฀ –฀ $฀ –฀ $฀ –
Long-term฀debt฀ ฀ ฀ 5,776฀ ฀ –฀ ฀ 175฀ ฀ 187฀ ฀ 201฀ ฀ 5,213
Operating฀lease฀payments฀ ฀฀13,207฀ ฀ 1,804฀ ฀ 1,615฀ ฀ 1,495฀ ฀ 1,281฀ ฀ 7,012
Purchase฀obligations฀ ฀ ฀฀32,455฀ ฀฀26,073฀ ฀ 6,382฀ ฀ –฀ ฀ –฀ ฀ –
Total฀contractual฀
฀ obligations฀ ฀ $฀57,581฀ $฀34,020฀ $฀ 8,172฀ $฀ 1,682฀ $฀ 1,482฀ $฀12,225฀
Additionally,฀the฀Company฀intends฀to฀fund,฀through฀the฀use฀of฀a฀letter฀of฀credit฀or฀bond฀facility,฀any฀
monies,฀other฀than฀the฀quarterly฀escrow฀deposits,฀that฀the฀Company฀would฀owe฀to฀NTP฀as฀determined฀
by฀the฀Court฀and฀any฀conrmed฀by฀future฀nal฀Court฀rulings฀(see฀Litigation).
Market฀Risk฀of฀Financial฀Instruments฀
The฀Company฀is฀engaged฀in฀operating฀and฀nancing฀activities฀that฀generate฀risk฀in฀three฀primary฀areas:
Foreign฀Exchange
The฀majority฀of฀the฀Company’s฀revenues฀are฀transacted฀in฀U.S.฀dollars฀and฀British฀pounds฀sterling.฀
Purchases฀of฀raw฀materials฀are฀primarily฀transacted฀in฀U.S.฀dollars.฀Certain฀other฀expenses,฀consisting฀
of฀salaries,฀operating฀costs฀and฀manufacturing฀overhead,฀are฀incurred฀primarily฀in฀Canadian฀dollars.฀
The฀Company฀is฀exposed฀to฀foreign฀exchange฀risk฀as฀a฀result฀of฀transactions฀in฀currencies฀other฀than฀
its฀functional฀currency฀of฀the฀U.S.฀dollar.฀These฀foreign฀currencies฀include฀the฀Canadian฀Dollar,฀British฀
Pound,฀Euro,฀Australian฀Dollar฀and฀Japanese฀Yen.฀To฀mitigate฀the฀risks฀relating฀to฀foreign฀exchange฀