Blackberry 2012 Annual Report Download - page 179

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Research In Motion Limited
Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following table sets forth certain consolidated statement of operations data expressed as a percentage of revenue for the periods
indicated:
9
(2) During fiscal 2012, the Company recorded the pre-tax PlayBook Inventory Provision of approximately $485 million. See
“Critical Accountin
g
Policies and Estimates
–
Pla
y
Book Inventor
y
Provision”.
(3) Cost of sales, research and development and selling, marketing and administration expenses included approximately $125
million in total pre-tax charges related to the Cost Optimization Program to streamline operations across the Company during
fiscal 2012. Included in cost of sales, research and development, and selling, marketing and administration expenses for fiscal
2012, was approximately $14 million, $23 million and $88 million, respectively, of charges related to the Cost Optimization
Pro
g
ram. See “Overview
–
Cost O
p
timization Pro
g
ram and COR
E
”.
(4) During the fourth quarter of fiscal 2012, the Company recorded the pre-tax Q4 BlackBerry 7 Inventory Provision of
a
pp
roximatel
y
$267 million. See “Critical Accountin
g
Policies and Estimates
–
Q4 BlackBerr
y
7 Inventor
y
Provision”.
(5) During the fourth quarter of fiscal 2012, the Company performed a goodwill impairment test and based on the results of that test,
the Com
p
an
y
recorded a
p
re-tax Q4 Goodwill Im
p
airment Char
g
e of a
pp
roximatel
y
$355 million.
(6) In fiscal 2010, the Company settled all Visto Corporation (“Visto”) outstanding worldwide patent litigation (the “Visto
Litigation”). The key terms of the settlement involved the Company receiving a perpetual and fully-paid license on all Visto
patents, a transfer of certain Visto intellectual property, a one-time payment by the Company of $268 million and the parties
executing full and final releases in respect of the Visto Litigation. Of the total payment by the Company, $164 million was
ex
p
ensed as a liti
g
ation char
g
e in fiscal 2010. The remainder of the
p
a
y
ment was recorded as intan
g
ible assets.
For the Fiscal Year Ende
d
March 3,
2012
February 26,
2011
Change
2012/2011
February 27,
2010
Change
2011/2010
Revenue
100.0% 100.0%
—
100.
0
%
—
Cost of sales
64.3% 55.7% 8.6%
56.0%
(0.3%)
Gross mar
g
in
35.7%
44.3%
(8.6%)
44.0%
0.3%
O
p
eratin
g
ex
p
enses
Research and develo
p
ment
8.5%
6.8%
1.7%
6.5%
0.3%
Sellin
g
, marketin
g
and administration
14.1%
12.1%
2.0%
12.8%
(0.7%)
Amortization
3.1% 2.2% 0.9%
2.1%
0.1%
Im
p
airment of Goodwill
1.9%
—
1.9%
—
—
Liti
g
ation
—
—
—
1.1%
(1.1%)
27.6%
21.1%
6.5%
22.5%
(1.4%)
Income from o
p
erations
8.1%
23.2%
(15.1%)
21.5%
1.7%
Investment income
0.1%
—
0.1%
0.2%
(0.2%)
Income before income taxes
8.2%
23.2%
(15.0%)
21.7%
1.5%
Provision for income taxes
1.9%
6.2%
(4.3%)
5.4%
0.8%
Net income
6.3%
17.0%
(10.7%)
16.3%
0.7%