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Research In Motion Limited
Notes to the Consolidated Financial Statements
In millions of United States dollars, except share and per share data, and except as otherwise indicated
Fiscal 2013 Cost Optimization and Resource Efficiency (“CORE”) Program
In March 2012, the Company commenced the CORE program with the objective of improving the Company’s operations and
increasing efficiency. The program includes, among other things, the streamlining of the BlackBerry smartphone product
portfolio, the optimization of the Company’s global manufacturing footprint, the outsourcing of global repair services, the
alignment of the Company’s sales and marketing teams and a reduction in the number of layers of management. On June 28,
2012, the Company announced that it would be reducing its global workforce across all functions by approximately 5,000
employees, representing approximately 30% of the total global workforce, and that all impacted employees would receive
severance packages and outplacement support. The Company incurred approximately $220 million in total pre-tax charges
related to the CORE program in the fiscal year ended March 2, 2013, related to employee termination benefits, facilities costs
and manufacturing network simplification costs. Other charges and cash costs may occur as programs are implemented or
changes are completed.
The following table sets forth the activity in the Company’s CORE program for fiscal 2013:
The CORE charges incurred in fiscal 2013 were as follows:
There were no CORE charges incurred during fiscal 2012 or 2011.
As part of the CORE program, the Company has decided to sell certain redundant assets and discontinue certain operations to
drive cost savings and efficiencies in the Company. As a result, in fiscal 2013 certain property, plant and equipment assets have
been classified as held for sale on the Company’s consolidated balance sheets, valued at $14 million, the lower of carrying value
and fair value less costs to sell. Assets held for sale are expected to be sold within the next twelve months.
In December 2012 the Company sold 100% of the shares of its wholly-owned subsidiary, NewBay Software Limited
(“NewBay”). As a result, the Company has recognized a loss on disposal of $3 million, which is included in the loss from
discontinued operations line on the Company’s consolidated statements of operations for fiscal 2013.
38
11. COST OPTIMIZATION PROGRAMS
Employee
Termination
Benefits
Facilities
Costs
Manufacturing
Costs Total
Balance as at March 3, 2012
$
—
$
—
$
—
$
—
Char
g
es incurred
123 32 65
22
0
Cash
p
a
y
ments made
(114) (14) (63) (191)
Balance as at March 2, 2013
$9 $18 $ 2
$29
Cost of sales
$96
Research and develo
p
ment
27
Sellin
g
, marketin
g
and administration
97
Total
p
ro
g
ram char
g
e $220