Blackberry 2012 Annual Report Download - page 80

In addition, acts of terrorism and the outbreak of hostilities and armed conflicts within or between countries have created and may
continue to create uncertainties that may affect the global economy and could have a material adverse effect on the Company’s
business, results of operations and financial condition.
Acquisitions, divestitures, investments and other business initiatives may negatively affect the Company’s results of
operations.
The Company has acquired, and continues to seek out opportunities to acquire or invest in, businesses, assets, products, services and
technologies that expand, complement or are otherwise related to the Company’s business or provide opportunities for growth. These
activities create risks such as the need to integrate and manage the businesses, personnel, and products acquired with the business,
personnel and products of the Company, the challenges in achieving strategic objectives, cost savings and other benefits from
acquisitions, the potential loss of key employees of the acquired business at the time of the acquisition or upon the termination of their
non-compete covenants or obligations, additional demands on the Company’s management, resources, systems, procedures and
controls, disruption of the Company’s ongoing business, and diversion of management’s attention from other business concerns. Such
acquisitions, investments or other business collaborations may involve significant commitments of financial and other resources of
the Company. An acquisition may have an adverse effect on the Company’s cash position if all or a portion of the purchase price is
paid in cash, or common shares issuable in an acquisition would dilute the percentage ownership of the Company’s existing
shareholders. Any such activity may not be successful in generating revenue, income or other returns to the Company, and the
financial or other resources committed to such activities will not be available to the Company for other purposes. In addition, the
acquisitions may involve unanticipated costs and liabilities, including possible litigation and new or increased regulatory exposure,
that are not covered by the indemnity or escrow provisions, if any, of the acquisition agreement.
As business circumstances dictate, the Company may also decide to divest itself of assets or businesses. The Company has only
limited experience with sales of assets or businesses and may not be successful in identifying or managing the risks involved in any
divestiture, including its ability to obtain a reasonable purchase price for the assets, potential liabilities that may continue to apply to
the Company following the divestiture, potential tax implications, employee issues or other matters. The Company’s inability to
address these risks could adversely affect the Company’s business, results of operations and financial condition.
The Company is exposed to fluctuations in foreign currencies.
The Company is exposed to foreign exchange risk as a result of transactions in currencies other than its U.S. dollar functional
currency. The majority of the Company’s revenue and purchases of raw materials are denominated in U.S. dollars. However, some
revenue, a substantial portion of operating costs, including salaries and manufacturing overhead, as well as capital expenditures, are
incurred in other currencies, primarily Canadian dollars, Euros and the British Pound. If the Canadian dollar appreciates relative to the
U.S. dollar, the Company’s Canadian dollar denominated expenses will increase when converted to U.S. dollars for financial
reporting purposes. If the Euro depreciates relative to the U.S. dollar, the Company’s Euro denominated revenues will decrease when
translated to U.S. dollars for financial reporting purposes. Foreign exchange rate fluctuations may materially affect the Company’s
results of operations in future periods. For more details, please refer to the discussion of foreign exchange and income taxes in
Management’s Discussion and Analysis of Financial Condition and Results of Operations for the fiscal year ended March 3, 2012.
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