Blackberry 2014 Annual Report Download - page 46

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The Company may be required to record long-lived asset impairment charges, which could adversely impact the
Company’s financial results
Under generally accepted accounting principles in the United States, the Company reviews its long-lived assets for impairment
when events or changes in circumstances indicate the carrying value may not be recoverable.
As at March 1, 2014, the Company’s long-lived assets had a carrying value of approximately $2.4 billion. The assets represent
items such as the Company’s network infrastructure, owned office buildings and certain intellectual property, among others.
The current macroeconomic environment and competitive dynamics continue to be challenging to the Company’s business and
the Company cannot be certain of the duration of these conditions and their potential impact on the Company’s ability to
generate sufficient cash flows to fully recover the current carrying value of these assets. If it is determined that sufficient future
cash flows do not exist to support the current carrying value, the Company will be required to record an impairment charge for
long-lived assets in order to adjust the value of these assets to the newly established estimated value, as was the case in the third
quarter of fiscal 2014 where the Company recorded a long-lived asset write down of approximately $2.7 billion.
The occurrence or perception of a breach of the Company’s security measures or an inappropriate disclosure of
confidential or personal information could harm its business.
The BlackBerry wireless solution frequently involves the transmission of business-critical, proprietary, confidential and
personal information of end users. Like many other companies, the Company has been in the past, and expects to be in the
future, the target of attempts by unauthorized third parties to access such information by breaching security measures that the
Company or its partners have implemented.
Attempts by outside parties to access confidential or personal information of companies or their customers have, unfortunately,
become commonplace. Unauthorized parties can attempt to breach a company’s security measures through the actions of
outside parties (e.g., hacking or malware) or employee action (e.g., error, malfeasance, or otherwise), in an attempt to obtain
access to confidential or personal information. Additionally, outside parties may attempt to fraudulently induce employees,
users, partners or customers to disclose sensitive information in order to gain access to confidential or personal information.
Third party applications that are downloaded by a user on their BlackBerry smartphone could also increase the risk of a
potential unauthorized access, misuse or misdirection of confidential or personal information because some applications require
access to such information.
If the security measures implemented by the Company or its partners are breached, or perceived to be breached, or if there is an
inappropriate disclosure or misdirection of confidential or personal information, including as a result of a security breach or
virus relating to hardware or software, the Company could be exposed to litigation, potential liability and regulatory sanctions.
Even if the Company was not held liable, a security breach or inappropriate disclosure of confidential or personal information
(or the perception that such a breach has occurred) could materially damage the Company’s reputation, which is built in large
measure on the security and reliability of the BlackBerry wireless solution, and even the perception of security vulnerabilities in
the Company’s products or services could lead some customers, particularly governmental customers, to reduce or delay future
purchases or to purchase competitive products or services.
In addition, the Company may be required to invest additional resources or change its products and services to protect itself
against damage caused by these actual or perceived disruptions or security breaches in the future and these actions may have a
detrimental impact, for example, on cost, the user experience or compatibility with third party products and services. Since the
techniques used to obtain unauthorized access, disable or degrade service, or sabotage systems change frequently and often are
not recognized until launched against a target, or may not be identified until a later time, the Company may not be able to
anticipate these techniques, to implement adequate preventative measures or to remedy them in a timely manner. The risk that
these types of events could seriously harm the Company’s business may increase as the Company expands the number of web-
based products and services that it offers, increases the number of countries where the Company operates, and expands its
ecosystem to offer third party products and services in conjunction with its own.
The Company’s business depends on a strong brand, and failing to maintain and enhance its brand would hurt the
Company's ability to expand its base of users, customers and partners.
The brand identity that the Company developed significantly contributed to the success of its business. Maintaining and
enhancing the “BlackBerry” brand is critical to expanding the Company’s base of users, customers and partners. The Company
believes that the importance of brand recognition will increase due to the relatively low barriers to entry in the wireless
communications industry. On January 30, 2013, the Company announced its intention to adopt the name of its revolutionary
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