Blackberry 2013 Annual Report Download - page 217

Research In Motion Limited
Management’s Discussion and Analysis of Financial Condition and Results of Operations
A
ggregate Contractual Obligations
The following table sets out aggregate information about the Company’s contractual obligations and the periods in which payments
are due as at March 2, 2013:
Purchase obligations and commitments amounted to approximately $6.3 billion as at March 2, 2013, with purchase orders with
contract manufacturers representing approximately $4.9 billion of the total. The Company also has commitments on account of
capital expenditures of approximately $4 million included in this total, primarily for manufacturing and information technology,
including service operations. The remaining balance consists of purchase orders or contracts with suppliers of raw materials, as well
as other goods and services utilized in the operations of the Company including payments on account of licensing agreements. The
expected timing of payments and actual amounts to be paid for these purchase obligations and commitments is estimated based upon
current information and the Company’s existing contractual arrangements with suppliers. The timing of payments and actual amounts
paid may differ from estimates depending upon the timing of receipt of goods and services, changes to agreed-upon amounts for
certain obligations, and payment terms or changes to the contractual relationships between the Company and its suppliers. The
Company’s purchase obligations and commitments generally increase or decrease along with the demand for the Company’s
products, or as new service offerings are either launched or exited.
The Company has not paid any cash dividends in the last three fiscal years.
On September 25, 2012, the Company replaced its existing $500 million senior unsecured revolving credit facility with a syndicate of
commercial banks with a $500 million senior secured revolving credit facility (the “Facility”) for working capital and general
corporate purposes with the same syndicate of commercial banks. The Facility, which is subject to certain financial covenants and
expires on September 6, 2013, is secured by accounts receivable and inventory of the Company and certain of its subsidiaries. The
Company has provided collateral of approximately $6 million for its outstanding letters of credit as of March 2, 2013. The collateral
is held with one of the Company’s banks and is recorded within short-term investments.
Cash, cash equivalents, and investments were $2.9 billion as at March 2, 2013. Management is focused on maintaining appropriate
cash balances, efficiently managing working capital balances and the significant reduction in capital investments through the CORE
program and continues to evaluate the liquidity needs for the business as it evolves. In addition, the Company expects to pursue more
opportunities to attain further cost savings in the coming fiscal quarters as it pursues new ways to drive greater efficiencies. The
Company expects to maintain a strong cash position in the first quarter of fiscal 2014. Based on its current financial projections, the
Company believes its financial resources, together with expected future operating cash generating activities and available borrowings
under the Facility, or access to other potential financing arrangements, should be sufficient to meet funding requirements for current
financial commitments, for future operating expenditures not yet committed and also provide the necessary financial capacity for the
foreseeable future. As noted above, the Company’s expectations with respect to its cash position and future
52
(in millions)
Total
Less than One
Year
One to
Three Years
Four to Five
Years
Greater than
Five Years
Operating lease obligations
$253 $67 $ 8
0
$ 6
0
$46
Purchase obli
g
ations and commitments 6,044 5,744 30
0
—
—
Total
$6,297 $5,811 $38
0
$ 6
0
$46