Blackberry 2015 Annual Report Download - page 116

BlackBerry Limited
Management’s Discussion and Analysis of Financial Condition and Results of Operations
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• launched a substantial software update to the BlackBerry 10 smartphone platform, bringing BlackBerry 10.3.1 to in-
market BlackBerry 10 devices including the BlackBerry Classic, Passport, Z30, Z3, Z10, Q10, and Q5, as well as the
Porsche Design P’9983 and P’9982 smartphones;
• appointed Mike Daniels, a leading expert in cyber security, with extensive experience in the U.S. government and the
private sector, to the board of directors of the Company (the “Board”);
• appointed Dr. Sandeep Chennakeshu as President of the BTS unit, Marty Beard as Chief Operating Officer, Nita
White-Ivy as Executive Vice President, Human Resources, and Billy Ho as Executive Vice President, Enterprise
Products and Value Added Solutions;
• announced that BES10 and BES12 would be available as a hosted service through third-party partners worldwide,
which offers a diverse portfolio of EMM services, including dedicated BES10 and BES12 hosting, high availability
solutions, and fully managed services;
• received Security Technical Implementation Guide approval from the U.S. Defense Information Systems Agency for
Secure Work Space for iOS® and Android;
• completed the divestiture of the majority of the Company's real estate holdings in Canada (the “Real Estate Sale”);
• announced a three-year agreement with EnStream LP, a mobile payments joint venture owned by Canadian wireless
carriers Bell, Rogers and TELUS, to provide a secure platform that supports transaction services between leading
banks and consumers;
• announced an agreement with Salesforce.com Inc. to connect its customer relationship management platform to
BlackBerry's EMM solutions;
• announced an investment in healthcare information technology leader NantHealth LLC and collaboration on the
development of HIPAA and other government privacy certified, integrated clinical systems that facilitate the delivery
of medical care, including the launch of the next generation of NantHealth HBOX, a portable medical device that
captures and transmits secure medical data among patient, doctor and hospital featuring QNX technology; and
• provided for mobile device management companies to directly manage devices with the BlackBerry 10 operating
system, including AirWatch, Citrix and IBM.
The Company continues to enhance its BlackBerry 10 offerings with new value-added services, including advanced security
tools and additional enterprise services, new services for the Company’s strong BBM base, the creation of cross-platform
offerings and services that leverage BlackBerry’s social media community.
Non-GAAP Financial Measures
The Consolidated Financial Statements have been prepared in accordance with U.S. GAAP, and information contained in this
MD&A is presented on that basis. On March 27, 2015, the Company announced financial results for the three months and fiscal
year ended February 28, 2015, which included certain non-GAAP financial measures, including adjusted gross margin, adjusted
gross margin percentage, adjusted income (loss) from continuing operations before taxes, adjusted income (loss) from
continuing operations and adjusted diluted income (loss) per share from continuing operations.
For the three months ended February 28, 2015, these measures (collectively, the “Q4 Fiscal 2015 Non-GAAP Adjustments”)
consisted of:
• investment income recorded for the Rockstar Sale (as defined below under “Fiscal 2015 Summary Results of
Operations - Financial Highlights - Rockstar Patent Portfolio Sale”) of approximately $115 million (pre-tax and after-
tax) (the “Rockstar Sale Adjustment”),
• $58 million pre-tax ($57 million after tax) of CORE program charges, and
• the Q4 Fiscal 2015 Debentures Fair Value Adjustment (as defined below under “Fiscal 2015 Summary Results of
Operations - Financial Highlights - Debentures Fair Value Adjustment”) charge of approximately $50 million (pre-tax
and after tax).
The Company also reported the non-GAAP financial measure of free cash flow for the three months ended February 28, 2015
of $189 million. Free cash flow consists of operating cash flows of $216 million, less the effect of foreign exchange of $11
million and capital expenditures of $16 million.