Blackberry 2010 Annual Report Download - page 90

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which the outcome is not determinable or claims where the amount of the loss cannot be reasonably estimated. Any
settlements or awards under such claims are provided for when reasonably determinable.
Additional lawsuits and claims, including purported class actions and derivative actions, may be filed or made based
upon the Company’s historical stock option granting practices. Management assesses such claims and where considered
likely to result in a material exposure and, where the amount of the claim is quantifiable, provisions for loss are made
based on management’s assessment of the likely outcome. The Company does not provide for claims that are considered
unlikely to result in a significant loss, claims for which the outcome is not determinable or claims where the amount of the
loss cannot be reasonably estimated. Any settlements or awards under such claims are provided for when reasonably
determinable.
See the “Legal Proceedings and Regulatory Action” section of RIM’s Annual Information Form for additional unaudited
information regarding the Company’s legal proceedings, which is included in RIM’s Annual Report on Form 40-F and “Legal
Proceedings” in the Management’s Discussion and Analysis (“MD&A”) of financial condition and results of operations for
fiscal 2010.
13. PRODUCT WARRANTY
The Company estimates its warranty costs at the time of revenue recognition based on historical warranty claims
experience and records the expense in cost of sales. The warranty accrual balance is reviewed quarterly to establish that it
materially reflects the remaining obligation based on the anticipated future expenditures over the balance of the obligation
period. Adjustments are made when the actual warranty claim experience differs from estimates.
The change in the Company’s warranty expense and actual warranty experience from March 3, 2007 to February 27, 2010
as well as the accrued warranty obligations as at February 27, 2010 are set forth in the following table:
Accrued warranty obligations as at March 3, 2007 ......................................................................................... $ 36,669
Actual warranty experience during fiscal 2008 ............................................................................................... (68,166)
Fiscal 2008 warranty provision ...................................................................................................................... 116,045
Accrued warranty obligations as at March 1, 2008 ......................................................................................... 84,548
Actual warranty experience during fiscal 2009 ............................................................................................... (146,434)
Fiscal 2009 warranty provision ...................................................................................................................... 258,757
Adjustments for changes in estimate .............................................................................................................. (12,536)
Accrued warranty obligations as at February 28, 2009 ................................................................................... 184,335
Actual warranty experience during fiscal 2010 ................................................................................................ (416,393)
Fiscal 2010 warranty provision ....................................................................................................................... 462,834
Adjustments for changes in estimate .............................................................................................................. 21,541
Accrued warranty obligations as at February 27, 2010 .................................................................................... $ 252,317
14. EARNINGS PER SHARE
The following table sets forth the computation of basic and diluted earnings per share:
February 27,
2010
February 28,
2009
March 1,
2008
For the year ended
Net income for basic and diluted earnings per share available to common
shareholders ............................................................................................... $2,457,144 $1,892,616 $1,293,867
Weighted-average number of shares outstanding (000’s) — basic .................... 564,492 565,059 559,778
Effect of dilutive securities (000’s) — stock-based compensation ....................... 5,267 9,097 13,052
Weighted-average number of shares and assumed conversions (000’s) —
diluted ......................................................................................................... 569,759 574,156 572,830
Earnings per share — reported
Basic ............................................................................................................ $ 4.35 $ 3.35 $ 2.31
Diluted .......................................................................................................... $ 4.31 $ 3.30 $ 2.26
RESEARCH IN MOTION LIMITED
Notes to the Consolidated Financial Statements continued
In thousands of United States dollars, except share and per share data, and except as otherwise indicated
NOTES 12  14
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