Blackberry 2011 Annual Report Download - page 35

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Net Income
Net income was $3.4 billion in fiscal 2011 compared to net income of $2.5 billion in the prior fiscal year. The $954 million increase in
net income in fiscal 2011 primarily reflects an increase in gross margin in the amount of $2.2 billion, as well as an increase in
consolidated gross margin percentage, resulting primarily from the increased number of device shipments as well as an increase in
service revenue as a result of additional subscriber accounts, 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. Included in net income in fiscal
2010 was the impact of unusual charges of $96 million, a $175 million income tax benefit, which related to the foreign exchange
impact of the enactment of functional currency tax legislation in Canada, and a $164 million litigation charge, which related to the
settlement of the Visto Litigation. See “Results of Operations — Selling, Marketing, and Administration Expenses” for the fiscal year
ended February 26, 2011, “Results of Operations — Income Taxes” for the fiscal year ended February 26, 2011 and “Results of
Operations — Litigation Expenses” for the fiscal year ended February 26, 2011.
Basic EPS was $6.36 and diluted EPS was $6.34 in fiscal 2011, an increase of 46.2% and 47.1%, respectively, compared to $4.35
basic EPS and $4.31 diluted EPS in fiscal 2010. Diluted EPS of $4.31 for fiscal 2010 included approximately $0.06 from the impact of
unusual charges of $96 million, an income tax benefit of $175 million recognized during the first quarter of fiscal 2010 and a litigation
charge of $164 million recognized during the second quarter of fiscal 2010.
The weighted average number of common shares outstanding was 536 million common shares for basic EPS and 538 million
common shares for diluted EPS for the fiscal year ended February 26, 2011 compared to 565 million common shares for basic EPS
and 570 million common shares for diluted EPS for the fiscal year ended February 27, 2010.
Common Shares Outstanding
On March 22, 2011, there were 524 million common shares, options to purchase 5 million common shares, 3 million restricted share
units and 51,500 deferred share units outstanding.
The Company has not paid any cash dividends during the last three fiscal years.
Pursuant to the 2010 Repurchase Program, the Company repurchased and cancelled 12.3 million common shares at a cost of
$775 million during fiscal 2010. In the first three months of fiscal 2011, the Company repurchased and cancelled 5.9 million common
shares at a cost of $410 million. There was a reduction of approximately $23 million to capital stock and the amount paid in excess of
the per share paid-in capital of the common shares of $387 million was charged to retained earnings. Under the 2010 Repurchase
Program, the Company repurchased and cancelled 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.
Pursuant to the 2011 Repurchase Program, the Company repurchased and cancelled 31.3 million common shares at a cost of
$1.7 billion during the first nine months of fiscal 2011, resulting in the effective completion of the 2011 Repurchase Program. As a
result of the repurchase and cancellation, there was a reduction of approximately $119 million to capital stock and the amount paid in
excess of the per share paid-in capital of the common shares of $1.6 billion was charged to retained earnings.
The 31.3 million common shares purchased under the 2011 Repurchase Program together with the 18.2 million common shares
purchased by the Company under the 2010 Repurchase Program, represent approximately 10% of the Company’s public float of
common shares.
Fiscal year end February 27, 2010 compared to fiscal year ended February 28, 2009
Revenue
Revenue for fiscal 2010 was $15.0 billion, an increase of $3.9 billion, or 35.1%, from $11.1 billion in fiscal 2009.
22 RESEARCH IN MOTION ANNUAL REPORT 2011
MANAGEMENT’S DISCUSSION AND ANALYSIS