Blackberry 2011 Annual Report Download - page 24

The following table sets forth certain consolidated statement of operations data expressed as a percentage of revenue for the periods
indicated:
February 26,
2011
February 27,
2010
Change
2011/2010
February 28,
2009
Change
2010/2009
For the Fiscal Year Ended
Revenue 100.0% 100.0% –100.0% –
Cost of sales 55.7% 56.0% (0.3%) 53.9% 2.1%
Gross margin 44.3% 44.0% 0.3% 46.1% (2.1%)
Operating expenses
Research and development 6.8% 6.5% 0.3% 6.2% 0.3%
Selling, marketing and administration 12.1% 12.8% (0.7%) 13.5% (0.7%)
Amortization 2.2% 2.1% 0.1% 1.8% 0.3%
Litigation –1.1% (1.1%) –1.1%
21.1% 22.5% (1.4%) 21.5% 1.0%
Income from operations 23.2% 21.5% 1.7% 24.6% (3.1%)
Investment income 0.0% 0.2% (0.2%) 0.7% (0.5%)
Income before income taxes 23.2% 21.7% 1.5% 25.3% (3.6%)
Provision for income taxes 6.2% 5.4% 0.8% 8.2% (2.8%)
Net income 17.0% 16.3% 0.7% 17.1% (0.8%)
Revenue for fiscal 2011 was $19.9 billion, an increase of $4.9 billion, or 33.1%, from $15.0 billion in fiscal 2010. The number of
BlackBerry devices sold increased by approximately 15.6 million, or 43%, to approximately 52.3 million in fiscal 2011, compared to
approximately 36.7 million in fiscal 2010. Device revenue increased by $3.8 billion, or 31.7%, to $16.0 billion, reflecting primarily the
higher number of devices sold. Service revenue increased by $1.0 billion, or 48.1% to $3.2 billion, reflecting the increase in net new
BlackBerry subscriber accounts since the end of fiscal 2010. Software revenue increased by $35 million to $294 million in fiscal 2011
and other revenue increased by $40 million to $460 million in fiscal 2011.
The Company’s net income for fiscal 2011 was $3.4 billion, an increase of $954 million, or 38.8%, compared to net income of
$2.5 billion in fiscal 2010. The $954 million increase in net income in fiscal 2011 primarily reflects an increase in gross margin in the
amount of $2.2 billion, resulting primarily from the increased number of device shipments, an increase in service revenues as a result
of additional subscriber accounts, as well as an increase of consolidated gross margin percentage, which was partially offset by an
increase of $843 million in the Company’s operating expenses and an increase of $424 million in the provision for income taxes.
Basic earnings per share (“basic EPS”) was $6.36 and diluted earnings per share (“diluted EPS”) was $6.34 in fiscal 2011
compared to $4.35 basic EPS and $4.31 diluted EPS in fiscal 2010, a 47.1% increase in diluted EPS compared to fiscal 2010.
A more comprehensive analysis of these factors is contained in “Results of Operations”.
On November 4, 2009, the Company’s Board of Directors authorized the repurchase of common shares up to an authorized limit of
$1.2 billion (the “2010 Repurchase Program”). Under the 2010 Repurchase Program, the Company repurchased a total of 18.2 million
common shares for an aggregate cost of $1.2 billion, resulting in the effective completion of the 2010 Repurchase Program. The
Company repurchased approximately 5.9 million of the 18.2 million common shares at a cost of $410 million during the first three
months of fiscal 2011. All common shares repurchased by the Company pursuant to the 2010 Repurchase Program have been
cancelled.
On June 24, 2010, the Company’s Board of Directors authorized a share repurchase program to purchase for cancellation up to
approximately 31 million common shares (the “2011 Repurchase Program”). Under the 2011 Repurchase Program, the Company has
repurchased a total of 31.3 million common shares for an aggregate cost of $1.7 billion, resulting in the effective completion of the
2011 Repurchase Program. All common shares repurchased by the Company pursuant to the 2011 Repurchase program have been
cancelled.
RESEARCH IN MOTION ANNUAL REPORT 2011 11