Blackberry 2016 Annual Report Download - page 113

BlackBerry Limited
Management’s Discussion and Analysis of Financial Condition and Results of Operations
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• Announced the availability of the Company’s multi-OS EMM platform in the Microsoft Azure Marketplace, allowing
customers full access to their BES12 licenses while benefiting from the Microsoft cloud architecture.
Financial Highlights
• Achieved positive free cash flow and positive adjusted EBITDA in each of the quarters in fiscal 2016;
• Achieved non-GAAP revenue of approximately $527 million from software and services for the year;
• Commenced a normal course issuer bid to purchase up to 27 million common shares of the Company; and
• Commenced the RAP with the objectives of reallocating Company resources to capitalize on growth opportunities,
providing the operational ability to better leverage contract research and development services relating to its handheld
devices, and reaching sustainable profitability.
Director and Executive Officer Appointments
• Appointed the Honourable Wayne G. Wouters, PC, an executive leader in government relations, strategic leadership,
international trade and economic policy, to the board of directors of the Company (the “Board”);
• Appointed Laurie Smaldone Alsup, M.D., an executive leader in drug development, regulatory strategy, and regulatory
approvals in the pharmaceutical and biotechnology industries, to the Board; and
• Appointed Carl Wiese as President of Global Sales of the Company.
Change in Fiscal Year
Effective in the fourth quarter of fiscal 2016, the Company changed its fiscal year from a 52 or 53 week year ending the last
Saturday in February or the first Saturday in March to a calendar basis ending the last day of February. The purpose of this
change is to be consistent with common practice in the software industry. The Company believes this is appropriate due to its
increased emphasis on software and its completed acquisitions of software companies with recurring revenue streams.
Accordingly, the Company’s fiscal quarters will end on the last days of May, August, November, and February. The Company
does not believe that the impact of the change is material.
For further information about the impact of the change in fiscal year, please see Note 1 to the Consolidated Financial
Statements.
Common Share Repurchase Program
On May 6, 2015, the Board authorized the Repurchase Program to purchase for cancellation up to 12 million common shares of
the Company, or approximately 2.5% of the outstanding public float as of June 22, 2015. The purpose of the Repurchase
Program is to offset dilution from the Company’s employee share purchase plan and an amendment to the Company’s equity
incentive plan increasing the number of shares available thereunder, both as approved by the shareholders of the Company on
June 23, 2015.
Daily purchases are limited to 578,619 common shares, other than block purchases. Pursuant to a Notice of Intention to Make a
Normal Course Issuer Bid dated June 25, 2015, the Repurchase Program commenced on June 29, 2015 and will terminate on
June 28, 2016 or on such earlier date as BlackBerry may complete its purchases under such program.
On January 29, 2016 the Company sought and received regulatory approval from the Toronto Stock Exchange to increase the
maximum number of common shares that may be repurchased from 12 million common shares to 27 million common shares,
or 5.8% of the public float as of June 22, 2015. The Company also announced that it had entered into an automatic purchase
plan with its designated broker to allow for purchases of up to 2,685,524 common shares in connection with the Repurchase
Program..
During fiscal 2016, the Company repurchased 13 million common shares at a cost of approximately $93 million. The
Company recorded a reduction of approximately $59 million to capital stock and the amount paid in excess of the per share
paid-in capital of the common shares of approximately $34 million was charged to retained earnings. All common shares
repurchased by the Company pursuant to the Repurchase Program have been canceled.
The actual number of shares to be purchased and the timing and pricing of any additional purchases under the Repurchase
Program will depend on future market conditions and upon potential alternative uses for cash resources. There is no assurance
that any additional shares will be purchased under the Repurchase Program and the Company may elect to modify, suspend or
discontinue the program at any time without prior notice.
Operating Segments
As disclosed in Note 15 to the Consolidated Financial Statements, the Company reports segment information based on the
“management” approach. The management approach designates the internal reporting used by the chief operating decision
maker (“CODM”) for making decisions and assessing performance as a source of the Company’s reportable operating
segments. The CODM, who for the Company is the Chief Executive Officer, makes decisions and assesses the performance of
the Company on a consolidated basis, and the Company is a single reportable operating segment.