Blackberry 2012 Annual Report Download - page 211

Research In Motion Limited
Management’s Discussion and Analysis of Financial Condition and Results of Operations
Amortization Expense
The table below presents a comparison of amortization expense relating to property, plant and equipment and intangible assets
recorded as amortization or cost of sales for the quarter ended March 3, 2012 compared to the quarter ended February 26, 2011.
Intangible assets are comprised of intellectual property and acquired technology.
A
mortization
Amortization expense relating to certain property, plant and equipment and certain intangible assets increased by $27 million to $152
million for the fourth quarter of fiscal 2012 compared to $125 million for the comparable period in fiscal 2011, which primarily
reflects the impact of certain property, plant and equipment and intangible asset additions made during fiscal 2012.
Cost of sales
Amortization expense relating to certain property, plant and equipment and certain intangible assets employed in the Company’s
manufacturing operations and BlackBerry service operations increased by $51 million to $237 million for the fourth quarter of fiscal
2012 compared to $186 million for the comparable period in fiscal 2011. The increase primarily reflects the impact of certain
property, plant and equipment and intangible asset additions made during fiscal 2012.
In the second quarter of fiscal 2012, the Company formed part of a consortium of certain technology companies that entered a
successful bid for all of Nortel’s remaining patents and patent applications. The purchase includes more than 6,000 patents and patent
applications spanning wireless, wireless 4G, data networking, voice, internet and other patents. The Company received clearance
from the United States Department of Justice on February 13, 2012 allowing the Company to obtain the rights to certain intellectual
property, and as at March 3, 2012, the majority of the Company’s interest in this transaction was reclassified as intangible assets. The
Company expects this transaction to increase its total amortization expenses, however, the Company does not expect the increase to
be significant.
41
For the Three Months Ended
(in millions)
Included in Amortization Included in Cost of sales
March 3,
2012
February 26,
2011 Chan
g
e
March 3,
2012
February 26,
2011 Chan
g
e
Property, plant and equipment
$94 $78 $16 $77 $66 $11
Intan
g
ible assets 58 47 11 160 120 40
Total $152 $125 $27 $237 $186 $51