Blackberry 2005 Annual Report Download - page 33

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31
Operating Activities
Cash flow provided by operating activities was $278.0 million in fiscal 2005 compared to cash flow provided
by operating activities of $63.8 million in the preceding fiscal year, an increase of $214.1 million. Increases in
net income and amortization expense account for $161.6 million and $12.2 million respectively of this net
increase. The table below summarizes the key components of the changes in working capital items.
Fiscal year ended February 26, 2005 February 28, 2004 Change 2005/2004
Changes in working capital items:
Trade receivables $(115,246) $(54,410) $(60,836)
Other receivables (18,257) (7,611) (10,646)
Inventory (49,653) (11,561) (38,092)
Accounts payable 32,894 16,976 15,918
Accrued liabilities 16,528 16,123 405
Income taxes payable 1,465 (3,225) 4,690
All other (1,609) 2,674 (4,283)
Changes in working capital items
– before NTP litigation items (133,878) (41,034) (92,844)
Litigation provision 351,218 33,690 317,528
Restricted cash (75,717) (36,261) (39,456)
Sub-total 275,501 (2,571) 278,072
$141,623 $(43,605) $185,228
For fiscal 2005, the majority of cash generated by working capital resulted from an increase in the litigation
provision of $351.2 million, as discussed in “Results of Operations – Litigation” and note 15 to the Consolidated
Financial Statements, less the increase in Restricted cash of $75.7 milllion. This increase was partially offset
by increases in trade receivables of $115.2 million and inventory of $49.7 million (generally consistent with the
Company’s revenue growth), as well as other receivables of $18.3 million.
For fiscal 2004, cash flow generated from operating activities was $63.8 million. Net income plus amortization
was $106.4 million. The majority of cash applied to working capital resulted from increases in trade
receivables of $54.4 million and inventory of $11.6 million (generally consistent with the Company’s revenue
growth), as well as other receivables of $7.6 million. These increases were partially offset by an increase in
accounts payable of $17.0 million and accrued liabilities of $16.1 million. The increase in accrued litigation of
$33.7 million was approximately offset by the increase in restricted cash of $36.3 million, which relates to
the Company’s quarterly funding requirement to deposit funds into an escrow account with respect to the NTP
matter. See “NTP Litigation Funding”.
Financing Activities
During fiscal 2005, cash flow generated from financing activities was $54.0 million including $54.2 million
of proceeds upon the issuance of share capital related to the exercise of stock options. The Company repaid
$0.2 million of debt in fiscal 2005.
During fiscal 2004, cash flow generated from financing activities was $948.9 million including $905.2 million
in net proceeds from the Company’s public offering of 12.1 million shares at $78.25 per share (on a pre-split
basis), and $49.8 million of proceeds upon the issuance of share capital related to the exercise of stock
options. The Company repaid $6.1 million of debt in fiscal 2004.
For the years ended February 26, 2005, February 28, 2004 and March 1, 2003